EURGBP Reacts to Slope Resistance- Reversal Setup Targets Weekly Open
- EUR/GBP marks strong divergence into resistance (shorts favored)
- Updated targets & invalidation levels
- Event Risk on Tap This Week
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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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:
- NZD/USD Shorts Favored Sub- 6759- Range Break to Clear the Way
- Webinar: Dollar Prospects Hinge on Yellen- EUR, GBP Setups Favored
- USD/CAD Approaches Key Support Ahead of NFP- Buy Dips or Sell Rips?
- GBPUSD Breakout Levels- Key Resistance in Focus Ahead of BoE
- EURUSD Consolidation Break Imminent- Levels To Know
---Written by Michael Boutros, Currency Strategist with DailyFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.