• Last Candlesticks pattern: N/A
• ime of formation: N/A
• Trend bias: Near term up
• Last Candlesticks pattern: Hammer
• Time of formation: 3 Feb 2016
• Trend bias: Up
EURGBP – 0.8776
As the single currency has retreated after last week’s brief rise to 0.8882, retaining our view that further 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, last week’s retreat after brief rise to 0.8882 formed a shooting star as suggested in our previous update, retaining our view that consolidation below this level would be seen and initial downside bias remains 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.