Weekly
• Last Candlesticks pattern: N/A
• Time 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 – 0.8962
As the single currency found good support at 0.8746 late last month and has rebounded, suggesting the decline from 0.9307 has ended there and consolidation with mild upside bias is seen for retracement of this move to the lower Kumo (now at 0.9025), then 0.9045-50, however, reckon upside would be limited to 0.9110-15 and as top has been formed at 0.9307, reckon upside would be limited to 0.9150 and price should falter below 0.9203, bring another leg of corrective decline later this month.
On the downside, whilst pullback to 0.8900-10 cannot be ruled out, reckon the Tenkan-Sen (now at 0.8882) would limit downside and 0.8820-25 should hold and bring another rebound later. A daily close below 0.8020-25 would suggest the rebound from 0.8746 has ended and bring weakness to 0.8790-00, then towards this recent low later. Looking ahead, only break of 0.8746 would signal the 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, despite falling marginally to 0.8746 (a doji star was formed), last week’s rebound formed a white candlestick, suggesting at least the first leg of decline from 0.9307 top has ended there, hence consolidation with mild upside bias is seen for gain to the Tenkan-Sen (now at 0.9027) and then 0.9050, 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 later this month.
On the downside, expect pullback to be limited to 0.8900 and 0.8840-45 should hold, bring another rebound later. Only a drop below last week’s low at 0.8801 would suggest the rebound from 0.8746 has ended and bring retest of this level, break there would signal another leg of corrective decline from 0.9307 top is underway and bring retracement of early upmove to 0.8690-95 (61.8% Fibonacci retracement of 0.8312-0.9307) and possibly support at 0.8562, however, 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.
