EUR/GBP outlook: Strong rebound extends after completion of reversal pattern

Slobodan Drvenica Windsor Brokers

EUR/GBP

The cross extends strong rebound on Tuesday after Monday's strong rally (the pair was up 1.03% and made the biggest one-day advance since 15 May) completed reversal pattern on daily chart. Sterling was additionally hurt by UK GDP data miss, while Euro remains inflated by weak dollar and with no negative impact from weaker than expected German ZEW data. Daily studies returned to bullish setup and support the advance and Monday's massive bullish daily candle also underpins the action Bulls surged today through thick 4-hr cloud and cracked pivotal Fibo barrier at 0.9084 (61.8% of 0.9175/0.8937), close above which would generate fresh bullish signal for test of 0.9119 (Fibo 76.4%/upper 20-d Bollinger band) and open way for possible full retracement of 0.9175/0.8937 descend. Broken 50% retracement at 0.9056 reverted to solid support which is expected to contain dips and maintain bullish bias. Lower breakpoint lays at 0.9028/26 (broken Fibo 38.2% / session low / 20DMA) and only break here would neutralize bulls.

Res: 0.9084; 0.9100; 0.9119; 0.9144
Sup: 0.9056; 0.9026; 0.9006; 0.8993

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.

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