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 – 0.8765
The single currency has continued to fall after breaking below previous support at 0.8856 and price finally penetrated previous chart support at 0.8746, signaling the decline from 0.9307 top is still in progress and may extend further weakness to 0.8690-95 (61.8% Fibonacci retracement of 0.8312-0.9307) and possibly towards previous support at 0.8652, however, near term oversold condition should prevent sharp fall below 0.8600, risk from there has increased for a rebound to take place later.
On the upside, whilst recovery to 0.8820-25 cannot be ruled out, reckon the Tenkan-Sen (now at 0.8894) would limit upside and bring another decline later. Above 0.8900-05 would defer and suggest low is possibly formed instead, bring a stronger rebound to 0.8955-60 but only break of resistance at 0.8976 would confirm and bring a stronger rebound towards resistance at 0.9033 which is likely to hold from here. Looking ahead, only a break of said resistance at 0.9033 would suggest the fall from 0.9307 has ended, then further gain to 0.9050-60 and possibly 0.9100-10 would follow but reckon upside would be limited and price should falter below 0.9203.
Recommendation: Stand aside for this week.
On the weekly chart, the single currency has dropped again and broke below previous support at 0.8746, signal another leg of corrective decline from 0.9307 top is in progress, hence downside bias is seen for this move to bring retracement of early upmove to 0.8690-95 (61.8% Fibonacci retracement of 0.8312-0.9307) and possibly support at 0.8562 but 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.
On the upside, expect recovery to be limited to 0.8820-25 and this week’s high at 0.8849 should hold, bring another decline. Above the Kijun-Sen (now at 0.8846) would bring test of the Tenkan-Sen (now at 0.8980) but break there is needed to signal low is formed instead, bring a stronger rebound to 0.9023-33 resistance. Only a break of indicated resistance at 0.9033 would suggest the retreat from 0.9307 has possibly ended, bring recovery to 0.9060-70 and then 0.9120-25 but upside should be limited to 0.9203 and price should falter well below 0.9307, bring another leg of decline in later part of Q4.
