Technical Analysis – EURGBP 4-hourly: Euro at 1-year low against pound
January 20, 2014 9:47 am
(click to enlarge)
The pound had an interesting first few days to 2014, particularly against the euro, which is also failing to build on its good performance of 2013. The euro fell to its lowest against the pound since early January of 2013 on 9th January 2014 at 0.8229. This level represents support for now, as it held when it was tested on 9 January.
There was then a recovery which raised the euro more than a penny higher to 0.8348. This represented the high for 2014 and it is the first resistance point, in the case the euro recovers.
Further up, there is the 3-month high of 0.8466 which was made around the middle of December of the previous year. This represents the second resistance point.
There was a significant drop in the euro on Friday following the release of sterling-friendly December retail sales for the UK. In addition, there has been some follow-through selling of euro.
Overall the trend appears to be bearish on the short- to medium-term horizons. Price action is well below both the simple 50-period and the exponential 21-period moving averages for example.
If the euro makes fresh 1-year lows below 0.8229, it could accelerate the downward path. At the moment this could prove a little difficult as the down move looks rather extended. The RSI – although in bearish territory – is right at the boundary between being oversold and bearish at 30.
To sum up, following some consolidation or a brief corrective bounce, the euro could fall further against the pound according to this chart.
(click to enlarge)
The pound had an interesting first few days to 2014, particularly against the euro, which is also failing to build on its good performance of 2013. The euro fell to its lowest against the pound since early January of 2013 on 9th January 2014 at 0.8229. This level represents support for now, as it held when it was tested on 9 January.
There was then a recovery which raised the euro more than a penny higher to 0.8348. This represented the high for 2014 and it is the first resistance point, in the case the euro recovers.
Further up, there is the 3-month high of 0.8466 which was made around the middle of December of the previous year. This represents the second resistance point.
There was a significant drop in the euro on Friday following the release of sterling-friendly December retail sales for the UK. In addition, there has been some follow-through selling of euro.
Overall the trend appears to be bearish on the short- to medium-term horizons. Price action is well below both the simple 50-period and the exponential 21-period moving averages for example.
If the euro makes fresh 1-year lows below 0.8229, it could accelerate the downward path. At the moment this could prove a little difficult as the down move looks rather extended. The RSI – although in bearish territory – is right at the boundary between being oversold and bearish at 30.
To sum up, following some consolidation or a brief corrective bounce, the euro could fall further against the pound according to this chart.
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