Following up with the previous update, the EUR/GBP has reached the 0.7960 projection. The 0.7950-0.7960 area was seen as support, as it included a previous resistance pivot, and more importantly a rising trendline going back to August, seen more clearly in the daily chart.
In the 4H chart, we see a break below the rising trendline. Another key signal is the RSI tagging 30, a show of bearish momentum, although in the near-term it could be a sign of oversold conditions, and invite some brief corrective rally as the market fights off the trendline break. If the 4H RSI can hold below 60, preferably below 50, we would see new bearish momentum developing.
The bearish scenario opens up the 0.7755 2012-low seen in the daily chart, though we should be sure it can clear 0.7895 (61.8% retracement) to consider the low.
Bullish scenario: To the upside, a break above 0.8022/0.8025 should refocus the pair to the upside, especially if the RSI in the 4H chart rallies above 60. At that point the market is bullish to sideways at best, not bearish. However, the bullish outlook is at the moment limited by a key declining trendline that goes back to June 2011.
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.
Most Popular Slideshows
- Australia Bids Adieu to Adam Spencer's Mornings on ABC's "702 Breakfast" Show [PHOTOS]
- Top 10 Hottest Celebrities with Shocking Weight Loss (And Find Out Their Secrets!) [PHOTOS]
- SEE PHOTOS! Eva Longoria Wears No Panties at Cannes 2013, Revealed in Embarrassing Wardrobe Malfunction [SLIDESHOW]
- Demi Lovato Snapped Getting Flirty with The X-Factor Boss, Simon Cowell? [PHOTOS]