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EURGBP Reacts to Slope Resistance- Reversal Setup Targets Weekly Open

EURGBP Reacts to Slope Resistance- Reversal Setup Targets Weekly Open

Michael Boutros,

Talking Points


Chart Created Using FXCM Marketscope 2.0

Technical Outlook: EURGBP has been trading within the confines of a well-defined ascending median-line formation off the 2015 lows with the recent advance reversing off key confluence resistance at 7840/45. Note that the daily momentum signature has marked some bearish divergence on this last stretch and suggests that the immediate topside bias may be waning.

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EURGBP 30min

Notes: An embedded ascending median-line formation off the November low has continued to define the advance with yesterday’s highs reversing sharply at the upper median-line parallel. Interim support rests at 7722 and 7685 with a more significant support confluence eyed at 7647/60. Note that the lower median-line parallel converges on this range into the close of the week & may offer favorable long entries if we do get down there. A break below the monhtly open at 7598 shifts the broader focus lower with such a scneario eyeing initial targets at 7542/51 & 7516.

Interim resistance stands at 7770 with a breach above the monthly high-day close at 7799 invalidating our near-term short-bias. Subsequnt topside resistance objectives eyed at 7889 & the 80-handle. A quarter of the daily average true range yields profit targets of 24-26 pips per scalp. Added caution is warranted heading into the close of the week Eurozone 4Q advanced GDP likely to fuel volatility in the EUR crosses.

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Relevant Data Releases

Other Setups in Play:

---Written by Michael Boutros, Currency Strategist with DailyFX

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.