EUR/GBP outlook: Thin daily cloud provides a lot of headwinds and keeps risk of recovery stall

Slobodan Drvenica Windsor Brokers

EUR/GBP

Two-day recovery seems to be running out of steam, following repeated failure to break above thin daily cloud, with long upper shadows on daily candles, warning of persisting pressure.

Technical picture on daily chart is bearishly aligned as MA’s remain in full bearish setup and 14-day momentum turned south and nearing the centreline.

Another failure to clear cloud top, reinforced by 55DMA would add to signals of recovery stall and increase risk of fresh weakness and retest of 0.8530 (Apr 30 low) and 0.8520 (Apr 14 low).

Only acceleration and close above 0.8560 /75 zone, where a cluster of daily MA’s (10/20/100) and Fibo 38.2% of 0.8644/0.8530 bear-leg) would provide relief and shift near-term focus to the upside.

Res: 0.8560; 0.8575; 0.8587; 0.8605.
Sup: 0.8545; 0.8530; 0.8520; 0.8503.

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 retreats toward 1.1600 after upbeat US data

EUR/USD pulls away from session highs and declines toward 1.1600 in the American session on Wednesday. Upbeat private sector employment and ISM Services PMI data from the US help the US Dollar (USD) stay resilient against its rivals, limiting the pair's upside.

GBP/USD meets resistance around 1.3400

In line with its risk-linked peers, GBP/USD stages a modest comeback on Wednesday, although meeting some resistance around the 1.3400 neighbourhood. Cable’s humble recovery struggles to gather momentum as the Greenback benefits from better-than-forecast macroeconomic data releases.

Gold loses traction after testing $5,200

Gold corrects lower after testing $5,200 but manages to stay in positive territory in the second hald of the day on Wednesday. The precious metal remains well supported by the deterioration of the geopolitical scenario in the Middle East, while the US Dollar's resilience caps the upside.