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
Despite last week’s choppy trading, the single currency has remained confined within recent established range, suggesting further consolidation would be seen and recovery to 0.8975-80, then 0.9000 is likely, however, reckon indicated resistance at 0.9033 would hold from here, bring further sideways trading. Only a break of said resistance at 0.9033 would suggest a temporary low has been formed at 0.8746, bring a stronger rebound to 0.9050-60 but reckon upside would be limited to 0.9110-15 and as top has been formed at 0.9307, price should falter below 0.9203, bring another leg of corrective decline later.
On the downside, below 0.8880 (this week’s low) would bring test of previous support at 0.8856 but break there is needed to revive bearishness and suggest the rebound from 0.8746 low has ended and bring further fall to 0.8800, break there would bring retest of 0.8746. 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.
Recommendation: Stand aside for this week.
On the weekly chart, the single currency has remained locked within near term established range and further consolidation below the Tenkan-Sen would be seen. Only a break of indicated resistance at 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 in later part of Q4.
On the downside, below support at 0.8856 would suggest the recovery from 0.8746 has ended and bring another test of this level, break there would add credence to our view that top has been formed at 0.9307 and signal another leg of decline from this top is underway for 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.
