Candlesticks Weekly

EUR/GBP Candlesticks and Ichimoku Analysis

Typography

Weekly
    •    Last Candlesticks pattern: N/A
    •    ime of formation: N/A
    •    Trend bias: Near term up

Daily
    •    Last Candlesticks pattern: Hammer
    •    Time of formation: 3 Feb 2016
    •    Trend bias: Up


EURGBP – 0.8802

Although the single currency edged higher to 0.8882 yesterday, lack of follow through buying on break of previous resistance at 0.8866 and the subsequent retreat suggest several days of consolidation below this level would be seen and pullback to 0.8723 support cannot be ruled out, however, reckon previous support at 0.8652 would contain downside and bring another upmove later, above said resistance at 0.8882 would extend recent upmove to 0.8900 but overbought condition should prevent sharp move beyond 0.8940-50 (50% Fibonacci retracement of 0.9576-0.8304) and reckon psychological resistance at 0.9000 would hold from here, price should falter well below 0.9090 (61.8% Fibonacci retracement), bring retreat later. 

On the downside, whilst initial pullback to 0.8723 support is likely, reckon support at 0.8652 would attract renewed buying interest and bring another upmove later. Only a break below support at 0.8603 would suggest top is formed instead, bring retracement of recent upmove to 0.8550 but reckon previous support at 0.8524 would contain downside and price should stay well above 0.8450-60, bring a strong rebound later next month. 

Recommendation: Buy again at 0.8660 for 0.8880 with stop below 0.8560.




On the weekly chart, despite rising marginally to 0.8882, the quick retreat from there looks set to form a shooting star, hence consolidation below this level would be seen with initial downside bias for pullback to 0.8720-25, then 0.6890-00, however, reckon support at 0.8652 would limit downside and bring another rise later. Above said resistance at 0.8882 would signal the rise from 0.8304 low is still in progress for headway to 0.8900-10, then 0.8950, however, reckon upside would be limited to 0.9000 and 0.9045-50 should hold from here, price should falter well below 0.9090 (61.8% Fibonacci retracement).

On the downside, although pullback to 0.8720-25 cannot be ruled out, reckon support at 0.8652 would hold and bring another rise to aforesaid upside targets. A weekly close below the Kijun-Sen (now at 0.8597) would defer and suggest top is possibly formed, risk weakness to 0.8550 but a drop below previous resistance at 0.8531 is needed to add credence to this view, bring further fall to 0.8490-00, then towards support at 0.8457 which is likely to hold from here.

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Author: Action Forex
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