Slobodan Drvenica
Windsor Brokers
EUR/GBP
The cross jumped to the session high at 0.8585 after weaker than expected UK inflation data deflated sterling.
UK CPI (y/y Oct 1.5% vs 1.6% f/c and 1.7% prev) fell to its lowest since Nov 2016, with BoE's expectations for further fall (towards 1.25%) before it starts picking up.
Weaker pound after data delays larger bears, but stronger upticks are so far unlikely, as overall picture remains bearish.
Daily studies show strong negative momentum, with double bear-cross (10/20DMA/55/200DMA death-cross) and completion of bearish flag on weekly chart, keeping bias with bears.
Tuesday's violation of short-term consolidation range low (0.8575) adds to negative signals, with repeated close below 0.8575, to generate fresh bearish signal for extension towards key supports at 0.8490/70 zone (6 May/13 Mar lows/monthly cloud top).
Daily Tenkan-sen (0.8607) marks solid barrier which is expected to cap and keep bears intact, guarding upper pivot at 0.8663 (200WMA).
Res: 0.8585; 0.8607; 0.8615; 0.8663
Sup: 0.8557; 0.8489; 0.8470; 0.8388
The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.
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