EUR/GBP has seen a sharp rejection of the 21 and 55-day averages and below 0.8971 should see a test of the July low at 0.8937, removal of which would mark a top, according to the Credit Suisse analyst team. The pair is currently trading near the initial resistance at 0.8997, though.
“A break of the low of the past week at 0.8985 /71 is seen likely to expose the 0.8937 July low. Below here would see a bearish ‘double top’ complete to mark a more important swing lower with support then seen next at 0.8909, then more importantly at 0.8866/64 – the ‘neckline’ to the April/May base, June lows and 61.8% retracement of the April/June rally. Whilst we would look for this to hold at first, a break in due course can see support at 0.8779 next.”
“Resistance is seen at 0.8997 initially, with the immediate risk seen lower whilst below 0.9024/30. Above can see a move back to 0.9048, then 0.9060/65, but only above this latter area would see the risk turn back higher in the range.”
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