Weekly
• Last Candlesticks pattern: N/A
• ime of formation: N/A
• Trend bias: Near term up
Daily
• Last Candlesticks pattern: Shooting star
• Time of formation: 29 Aug 2017
• Trend bias: Down
EURGBP – 0.8954
Although the single currency rose to as high as 0.9033 late last week, the subsequent retreat suggests top is possibly formed there and consolidation with mild downside bias is seen for weakness to 0.8855-60, then towards 0.8800 but break of latter level is needed to signal the rebound from 0.8746 has ended, bring retest of this level later. Looking ahead, only a drop below 0.8746 would signal early fall from 0.9307 top has resumed and extend weakness towards 0.8690-95 (61.8% Fibonacci retracement of 0.8312-0.9307) but previous support at 0.8652 would hold.
On the upside, whilst initial recovery to 0.8990-00 cannot be ruled out, reckon said resistance at 0.9033 would cap upside and bring further consolidation. Only break there would suggest a temporary low has been formed at 0.8746, bring a stronger rebound to 0.9050-60, however, reckon upside would be limited to 0.9110-15 and as top has been formed at 0.9307, reckon upside would be limited to 0.9150 and price should falter below 0.9203, bring another leg of corrective decline later this month.
Recommendation: Stand aside for this week.
On the weekly chart, despite last week’s brief bounce to 0.9033, the subsequent retreat formed a black candlestick with a long upper shadow (a shooting star alike), suggesting the recovery from 0.8746 has possibly ended there and consolidation with mild downside bias is seen for weakness to 0.8800-05, however, break there is needed to signal another leg of decline from0.9307 top is underway for test of said support at 0.8746, break there would bring retracement of early upmove to 0.8690-95 (61.8% Fibonacci retracement of 0.8312-0.9307) and possibly support at 0.8562 but reckon downside would be limited to the lower Kumo (now at 0.8571) and previous resistance at 0.8531 should turn into support and contain euro’s downside.
On the upside, expect recovery to be limited to 0.9000 and said resistance at 0.9033 should hold, bring further consolidation, break of 0.9033 would suggest the retreat from 0.9307 has possibly ended, bring recovery to 0.9060-70, however, if our view that top has been formed at 0.9307 is correct, upside would be limited to 0.9120-25 and price should falter well below 0.9203, bring another leg of decline later this month.
