Technical Analysis – EURGBP holds in bearish sloping channel; risk of more losses
December 15, 2017 12:27 pm
EURGBP posted losses for two negative weeks in a row and over the last nine weeks, the pair has been trading within a downward sloping channel, starting at a peak of 0.9030 resistance level and touching a low at 0.8690. The latter barrier is a new seven-month low.
Looking at the 4-hour chart, in the short-term timeframe, the price is holding below the 0.8865 strong obstacle, which is slightly above the 200-simple moving average (SMA) and is approaching the 23.6% Fibonacci retracement level of the last big upward movement with low at 0.6939 and high at 0.9305. The fibo level stands near the 0.8745 barrier, and the 0.8732 – 0.8745 zone has been acting as a critical support for the bulls.
However, a penetration below 0.8732 could open the door for the 0.8690 key level or could extend the losses towards the return line of the sloping channel, near 0.8670. On the reverse side, if the euro/pound pair posts an upward run above 0.8865, that would shift the bias to a more bullish one and it could pave the way for a test of the 0.8980 resistance.
Short-term momentum is weak and the MACD oscillator is endorsing the scenario for further bearish movement as it lies below the zero line. It is worth mentioning that the price paused its downward tendency as it rebounded on the lower band of the Bollinger band, but the descending movement in the medium-term still holds.
EURGBP posted losses for two negative weeks in a row and over the last nine weeks, the pair has been trading within a downward sloping channel, starting at a peak of 0.9030 resistance level and touching a low at 0.8690. The latter barrier is a new seven-month low.
Looking at the 4-hour chart, in the short-term timeframe, the price is holding below the 0.8865 strong obstacle, which is slightly above the 200-simple moving average (SMA) and is approaching the 23.6% Fibonacci retracement level of the last big upward movement with low at 0.6939 and high at 0.9305. The fibo level stands near the 0.8745 barrier, and the 0.8732 – 0.8745 zone has been acting as a critical support for the bulls.
However, a penetration below 0.8732 could open the door for the 0.8690 key level or could extend the losses towards the return line of the sloping channel, near 0.8670. On the reverse side, if the euro/pound pair posts an upward run above 0.8865, that would shift the bias to a more bullish one and it could pave the way for a test of the 0.8980 resistance.
Short-term momentum is weak and the MACD oscillator is endorsing the scenario for further bearish movement as it lies below the zero line. It is worth mentioning that the price paused its downward tendency as it rebounded on the lower band of the Bollinger band, but the descending movement in the medium-term still holds.
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