EUR/GBP Eyeing Support Targets Ahead of UK Jobless Claims

Talking Points

• EURGBP Focus is lower ahead of UK employment data
• Updated targets & invalidation levels
• Looking for trade ideas? Review DailyFX’s 2016 4Q Projections

EUR/GBP Daily

Technical Outlook: EURGBP turned from a long-term Fibonacci level last month at 9191 with the decline continuing to respect these slope-lines derived off the 10/11 high. Heading into tomorrow’s UK Jobless claims, the focus remains lower while below the 2013 high at 8815 with upcoming support targets eyed at 8479/91 & 8349 – both areas of interest for near-term exhaustion.

EURGBP 240min

Notes: Initial resistance (and the weekly opening-range high) stands at 8709/39 Fibonacci zone backed by our near-term bearish invalidation level at 8815. From a trading standpoint, I’d be looking to fade strength into the lower parallels with initial targets eyed at the 8479 support confluence.A break below this level risks a larger correction towards 8415 and more significant support into 8349. A breach / close above 8969 would be needed to shift the broader focus back to the topside in EURGBP.

• A summary of the DailyFX Speculative Sentiment Index (SSI) shows traders are net short EURGBP- the ration stands at -1.98 (34% of traders are long)- weak bullish reading
• Long positions are 38.1% above levels seen last week while short positions are 35.2% lower over the same time period.
• Open interest remains low at 25.2% below its monthly average.
• The current dynamic of building long-positioning suggests that retail crowds are attempting fade this decline, leaving the risk for further losses near-term. Look for an increase in short-exposure as price approaches support for indications that the decline may be reaching near-term exhaustion.

Relevant Data Releases

Other Setups in Play:

• Webinar: USD 'Trump Bump' Targeting 13yr Highs- Key Fed Speak on Tap
• Gold Prices Plummet 6% as Trump Win Fuels Risk
• DXY, USD/JPY Rallies Eyeing Resistance Ahead of U. of Michigan
• Volatility Isn't Over Yet - NZD/USD Braces for RBNZ Rate Cut
• Election Roadmap for USD/CAD, NZD/USD, USD/JPY & Gold

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

Join Michael for Live Weekly Trading Webinars on Mondays on DailyFX at 13:30 GMT (8:30ET)

Follow Michaelon Twitter @MBForex contact him at mboutros@dailyfx.com or Click Here to be added to his email distribution list.