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.

EUR/USD bounces off lows, back to 1.1860

EUR/USD now manages to regain some balance, retesting the 1.1860-1.1870 band after bottoming out near 1.1830 following the US NFP data on Wednesday. The pair, in the meantime, remains on the defensive amid fresh upside traction surrounding the US Dollar.

GBP/USD rebounds to 1.3660, USD loses momentum

GBP/USD trades with decent gains in the 1.3660 region, regaining composure following the post-NFP knee-jerk toward the 1.3600 zone on Wednesday. Cable, in the meantime, should now shift its attention to key UK data due on Thursday, including preliminary GDP gauges.

Gold stays bid, still below $5,100

Gold keeps the bid tone well in place on Wednesday, retargeting the $5,100 zone per troy ounce on the back of humble gains in the US Dollar and firm US Treasury yields across the curve. Moving forward, the yellow metal’s next test will come from the release of US CPI figures on Friday.