EUR/GBP Price Fading Back Towards Support After Double-Digit Rally
EURGBP Price, Chart and Analysis:
- Weekly uptrend looks set to be broken but support remains near.
- Weekly chart remains overbought despite recent fade lower.
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EURGBP is currently making its fourth daily bear candle in a row and is set to break its recent near four-month uptrend on the weekly chart. The rally, in excess of 11% from the May 5 low at 0.8490 has been driven primarily by fundamental drivers as well as the chart showing a strong oversold signal back at the start of May. The pair is nearing a supportive zone of recent highs/lows between 0.9190 and 0.9210 and reaction here will set the tone for the next short-term move. A move lower would bring into play the January 2 exhaustion high at 0.9116 which preceded a four-month sell-off. Overall the daily chart remains positive unless this level is broken and closed below.
EURGBP Daily Price Chart (December 2018 – August 15, 2019)
On the weekly chart, EURGBP, the recent 11%+ rally looks set to be broken after the pair broke, but did not close above, the August 2017 high print at 0.9307. To the downside, 0.9116 remains relevant before the 0.9050 area. EURGBP is still in heavily overbought territory although the CCI indictor has just turned lower and suggests that upward momentum is slowing.
EURGBP Weekly Price Chart (January 2017 – August 15, 2019)
Retail traders are 19.1% net-long EURGBP according to the latest IG Client Sentiment Data, a bullish contrarian indicator. However recent daily and weekly positional changes give us a bearish contrarian biaseven though traders remain short.
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