EURGBP Outlook – Triangle support line comes under pressure as cross falls on upbeat UK data

Slobodan Drvenica Windsor Brokers

EURGBP

The cross fell below 0.88 handle and cracked daily cloud top (0.8794) after upbeat UK retail sales boosted pound, sidelining attempts for another attack at 200SMA.
Falling 200SMA (currently at 0.8828) repeatedly capped upside attempts in the past week, with strong rejections which left daily candles with long upper shadows, confirming the strength of barrier.
Daily studies remain in bullish setup and favor fresh upside, however, narrowing range in past few sessions formed a triangle, which could be seen as initial signal of stall of larger uptrend.
Indicators on daily chart (RSI / momentum) are turning lower and support scenario, but stronger reversal signal would be generated on close below pivotal supports, provided by: daily cloud top (0.8794: 100SMA (0.8788) and triangle support line / Fibo 38.2% of 0.8620/0.8840 (0.8784).
Bullish signal could be expected on break above triangle resistance line (0.8823), but eventual break and close above 200SMA is needed neutralize downside risk and signal bullish continuation.

Res: 0.8823; 0.8828; 0.8837; 0.8885
Sup: 0.8784; 0.8772; 0.8768; 0.8755

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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