EURGBP – strong bullish acceleration penetrated into thick daily cloud

Slobodan Drvenica Windsor Brokers

EURGBP

The Euro accelerated strongly higher today, driven by extended weakness of pound and penetrated into thick daily Ichimoku cloud (spanned between 0.8561 & 0.8887).
Today's rally that broke above 30 Dec spike high at 0.8667 completed Cup and Holder pattern, signaling bullish resumption of short-term uptrend from 0.8302 (05 Dec low), after the upleg left higher low at 0.8448 on 03 Jan.
Daily Tenkan-sen/Kijun-sen lines and MA's moved into bullish setup and remain supportive for further advance, as daily indicators show more room at the upside.
However, thick cloud marks strong barrier that may slow bulls at some point.
We are looking for regain of next pivotal point at 0.8749 (Fibo 38.2% of larger 0.9472/0.8302 descend), clear break of which is needed for another strong bullish signal.
Meantime, corrective easing could be anticipated on strongly overbought near-term studies.
Broken daily cloud base, reinforced by ascending Tenkan-sen line is marking solid support that should contain extended dips.
Alternatively, break and close below daily cloud would be seen as negative signal.

Res: 0.8700; 0.8749; 0.8800; 0.8887
Sup: 0.8634; 0.8581; 0.8561; 0.8515

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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