EURGBP: Bearish Bias Remains Intact Despite Rebound
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EURGBP Outlook Remains Negative Under 0.8803
EURGBP touched a 20-month low last week – just – before bouncing back out of oversold territory. The chart set-up remains pointed to the downside after the break lower and further losses cannot be counted out. On the longer-dated chart the next level of support appears at 0.8655, the broken November swing-low before a move lower all the way down to 0.8385 (May 2017 swing-low), a sharp fall from current levels.
On the upside the recent move higher has seen the gap on the January 23 candle nearly filled. The gap, between the Jan 23 low at 0.8760 and the January 24 high at 0.8725, needs to be filled to allow the price to weaken further. Above here is the important 61.8% Fibonacci retracement level at 0.8803, which should provide stiffer short-term resistance ahead of the 20-day moving average at 0.88170. If the pair break and close above here the negative bias is erased, and we would wait for further entry points.
EURGBP Daily Price Chart (March 2018 – January 30, 2018)
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