The cross rallied on Tuesday and retested Monday’s high at 0.8868, as pound was hit be weaker than expected UK data.
Bulls extend for the third straight day and set for further advance towards key near-term barrier at 0.8900 zone (19 Sep correction high / converged sideways-moving 100SMA / falling 20SMA).
Current recovery rally is seen as correction of broader downtrend which should be ideally capped at 0.8900 zone before bears resume.
Slow stochastic is entering overbought territory and supports scenario, with falling 20SMA on track to form bear-cross with 100SMA and produce additional pressure.
Alternative scenario requires sustained break above 0.8900 barrier to ease bearish pressure, but break above 0.8960 (Fibo 38.2% of 0.9306/0.8745 fall) is needed to confirm reversal and open way for further recovery.
Res: 0.8878, 0.8900, 0.8960, 0.9000
Sup: 0.8821, 0.8808, 0.8745, 0.8725
