Short-term technical outlook on EUR/GBP (Tues 11 Sep)
- The recent 200+ pips slide seen in the EUR/GBP cross pair from its 28 Aug 2018 high 0.9098 is now coming close to a key medium-term support level of 0.8865.
- The 0.8665 key medium-term support is defined by the lower boundary of an ascending channel in place since 17 Apr 2018 low, the pull-back support of a former range resistance from 12 Oct 2017 (in dotted green) and a Fibonacci retracement/projection cluster (refer to daily & hourly charts).
- The recent minor decline from 0.9052 high of 05 Sep 2018 to the 0.8888 current intraday low of 11 Sep 2018 has formed a minor bullish reversal “Descending Wedge” configuration with its upper boundary/resistance now at 0.8932 (refer to hourly chart).
- The hourly Stochastic oscillator (a momentum indicator) has traced out a bullish divergence signal at its oversold region which indicates that the momentum of its recent slide has started to abate.
- The next significant short-term resistance stands at the 0.930/9050 zone (the minor swing high area of 05 Sep 2018 and the 76.4% Fibonacci retracement of the current decline from 28 Aug 2018 high to 11 Sep 2018 current intraday low of 0.8888 (refer to hourly chart).
Key Levels (1 to 3 days)
Pivot (key support): 0.8865 (medium-term pivot)
Resistances: 0.8932 & 0.9030/9050
Next support: 0.8700
Therefore, as long as the 0.8865 key medium-term pivotal support holds, the EUR/GBP may see a push up to test 0.8932 and a break above it opens up scope for a potential minor bullish reversal to target the 0.9030/9050 resistance.
However, failure to hold above 0.8865 invalidates the bullish tone for a further decline to test the next support at 0.8700.
Charts are from eSignal