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 – 0.8677
The single currency has surged again after brief pullback to 0.8652, adding credence to our bullish view that recent rise from 0.8304 low is still in progress and upside bias remains for this move to extend further gain to 0.8900, however, near term 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 the Tenkan-Sen (now at 0.8759) and possibly 0.8700 cannot be ruled out, reckon said support at 0.8652 would contain downside and bring another upmove later to aforesaid upside targets. A daily close below the Kijun-Sen (now at 0.8632) would suggest top is formed instead, bring correction of recent rise to 0.8590-95, then 0.8550 but reckon previous support at 0.8524 would hold from here, bring rebound later.
Recommendation: Buy again at 0.8680 for 0.8880 with stop below 0.8580.
On the weekly chart, as the single currency has maintained a firm undertone after recent strong rebound, retaining our bullishness for the erratic rise from 0.8304 low to extend gain to 0.8840-50 (50% Fibonacci retracement of 0.9576-0.8304), then 0.8900-10, 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), risk from there has increased for a retreat to take place later this month.
On the downside, although pullback to 0.8700 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 0.8589) 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.
