Technical Analysis – EURGBP focus remains on the downside
January 2, 2014 10:49 am
Sterling remains strong against the euro, keeping EURGBP bearish.
Currently there is congestion at the 50% Fibonacci retracement level at 0.8286 of the move from the July low to the February high, as observed on the weekly chart.
This Fibonacci level acts as strong support in the near term but a potential move below this level toward the next 61.8% Fibonacci level at 0.8160 is possible as the weekly momentum is negative and RSI is in bearish territory below 50.
However the stochastic is in oversold territory and has flattened out, suggesting that a corrective bounce could be due. Today’s weaker-than-forecast UK manufacturing PMI data has stemmed the move down.
Any bounce higher will be met with resistance at the 38.2 Fib level at 0.8410 and the downtrend line. The 20-period moving average is also currently capping prices.
Sterling remains strong against the euro, keeping EURGBP bearish.
Currently there is congestion at the 50% Fibonacci retracement level at 0.8286 of the move from the July low to the February high, as observed on the weekly chart.
This Fibonacci level acts as strong support in the near term but a potential move below this level toward the next 61.8% Fibonacci level at 0.8160 is possible as the weekly momentum is negative and RSI is in bearish territory below 50.
However the stochastic is in oversold territory and has flattened out, suggesting that a corrective bounce could be due. Today’s weaker-than-forecast UK manufacturing PMI data has stemmed the move down.
Any bounce higher will be met with resistance at the 38.2 Fib level at 0.8410 and the downtrend line. The 20-period moving average is also currently capping prices.
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