UK’s Index Rally and Pound
|EURGBP,H1 and H4
European stock futures are rallying with U.S. futures, after a largely positive session in Asia. The Ger30 is closed for a holiday and Italy’s MIB continues to underperform and is down -1.58% as investors fret about the populist coalition that about to take government and is already drawing its battle lines with the rest of Europe. The UK100 meanwhile is up 0.46%, the CAC 40 0.26% and the Euro Stoxx 50 still up 0.07% amid signs that the Sino-American trade war is on hold for now and as EUR and Pound slide not just against the dollar.
The impressive rally of UK100 so far today, at new record highs at 7844.6, weighed on pound, with GBPUSD drifting lower to 1.3394 and EURGBP, rising sharply on London open up to 0.8762. The run of EURGBP has gave signs of the possible flip of the downwards scenario seen since May 10. The pair has broke above the range seen the last 3 day’s, within 0.8710 – 0.8750, with the latter be the confluence of the latest 2 up fractals in the 4-hour chart, but also the 50-DAY SMA. A sustain price action above this level and a possible closing today above it, would suggests that bulls are back and trying to gain the control of the pair. Hence if this is confirmed the pair is likely to retest the resistance levels within 61.8 Fibonacci retracement leel and 200- DAY EMA, at 0.8780-0.8800. Support comes at 0.8720.
In the hourly chart, the latest hourly candle, has definitely presented a strong indication to the upwards for today, since it is a relatively strong bullish candle which break and close above the 38.2% Fibonacci level. The pair is currently traded above 20 and 50-period SMA, at 0.8760, with the upper Bollinger Bands pattern being extended to the upwards. The momentum indicators have been gradually increasing their upwards progress, with RSI retesting the 70 level. A cross of the RSI above the 70 level would be a sign of the further upwards steam. The MACD lines have finally crossed to positive territory, but MACD is flattening above its trigger line, something that implies to a neutral to positive bias for the pair today.
The Initial support of the uptrend channel is at the latest swing low at 0.8735, while Resistance is at 50% Fibonacci level at 0.8775 and 0.8785.
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