Marshall Gittler
Trading Analysis
EUR/GBP
The dollar traded unchanged against almost all of its G10 peers during the European morning Monday, in the absence of any major market moving events due to a public holiday in many countries. The greenback was marginally lower against GBP and NZD.
EUR came under renewed selling pressure after comments by the Greek Interior Minister that Greece could not pay the IMF in June unless it reaches an agreement with its creditors. Greece basically has until the end of May to reach an agreement, otherwise, the country will have to default.
EUR/GBP traded somewhat lower during the European morning Monday, breaking below the support (turned into resistance) barrier of 0.7090 (R1). The move confirms a forthcoming lower low and is possible to trigger extensions towards the support hurdle of 0.7035 (S1). Our short-term oscillators detect negative momentum and support the case for further declines. The RSI slid towards its 30 line and could cross below it soon, while the MACD, already negative, has topped and could now fall below its trigger. On the daily chart, the rate is trading below both the 50- and 200-day moving averages, but a clear close below the psychological figure of 0.7000 (S2) is needed to signal the resumption of the prevailing longer-term downtrend.
Support: 0.7035 (S1), 0.7000 (S2), 0.6900 (S3).
Resistance: 0.7090 (R1) 0.7140 (R2), 0.7165 (R3).
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