EUR/GBP in extended sideways mode and looks for fresh direction signal
EUR/GBP
EURGBP keeps bullish stance but a multiple failure under 200DMA (0.8709) warn that bulls face strong headwinds and keep larger rally on hold.
The price has stayed below 200DMA indicator since early May that adds to signals of stall, as bullish momentum on daily chart is fading, stochastic is overbought and candlesticks of past four days have long upper shadows.
On the other hand, the downside was so far protected by broken Fibo 38.2% / 200WMA (0.8678), keeping the near-term action within a consolidation range and without clear direction.
Firm break of this support would generate initial bearish signal and open way for deeper correction towards 0.8650/0.8600 zone.
Neutral scenario prolonged sees sideways mode between 200DMA and 200WMA, while clear break of 200DMA pivot would generate initial signal of bullish continuation and expose targets at 0.8735 (50% retracement of 0.8978/0.8492) and 0.8763 (weekly cloud base).
Res: 0.8709; 0.8735; 0.8763; 0.8792.
Sup: 0.8678; 0.8648; 0.8610; 0.8596.
Author
Slobodan Drvenica
Windsor Brokers
Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.
