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 – 0.8826
The single currency has dropped again since late last week, suggesting recent reversal from 0.9307 top is still in progress and may extend weakness to 0.8770, below there would bring further decline to 0.8740-43, then towards 0.8700, however, near term oversold condition should limit downside and as the aforesaid selloff is a bit over-extended, reckon previous support at 0.8652 would hold from here, risk from there remains for a much-needed corrective rebound to take place later.
On the upside, whilst initial recovery to 0.8870-75, then 0.8900 cannot be ruled out, reckon the Tenkan-Sen (now at 0.8948) would limit upside and bring another decline later. Above the upper Kumo (now at 0.9006) would defer and suggest a temporary low is formed instead, risk test of the Kijun-Sen (now at 0.9041) and then towards 0.9060-65, having said that, as top has been formed at 0.9307, reckon upside would be limited to 0.9100-10 and the pair shall head south again from there later.
Recommendation: Stand aside for this week.
On the weekly chart, last week’s selloff formed long black candlestick, dampening our bullishness and signaling recent upmove has indeed ended at 0.9307 earlier, hence consolidation would take place below said resistance for the rest of 2017 and downside bias is seen for at least a retracement of recent upmove to 0.8740-45, then 0.8700, however, as broad outlook remains consolidative (gyration within 0.8304-0.9576 range should take place), downside should be limited to previous support at 0.8652 and price should stay above 0.8590-00, bring rebound later.
On the upside, expect recovery to be limited to 0.8900-10 and 0.8950-60 should hold, bring another decline. Above the Tenkan-Sen (now at 0.9041) would defer and risk a stronger rebound to 0.9040-50, however, upside should be limited to 0.9120-25 and price should falter below 0.9190-00, bring another decline later. Above 0.9225-30 would abort and suggest the retreat from 0.9307 has ended instead, bring retest of this level later.
