EUR/GBP traded lower on Friday, after it hit resistance at 0.8500. However, today, it found support at 0.8472, and then, it rebounded somewhat. Overall, the pair continues to trade below the downside resistance line taken from the high of September 29th, but since Thursday, it’s been struggling to go for a lower low. Thus, we will adopt a cautiously bearish stance for now.
In order to start examining the resumption of the prevailing downtrend, we would like to see a break below 0.8472. This will confirm a forthcoming lower low on the 4-hour chart and could initially target the 0.8450 hurdle, marked by the lows of August 10th and 11th. If the bears are not willing to stop there, then we could see them pushing the battle all the way down to the inside swing high of February 20th, 2020, at around 0.8420.
Shifting attention to our short-term oscillators, we see that the RSI rebounded from near 30, while the MACD, although negative, lies above its trigger line and points up. Both indicators detect slowing downside speed, suggesting that today’s rebound may continue for a while more. However, as long as EUR/GBP is trading below the aforementioned downside line, we cannot call for a bullish reversal.
In order to do so, we would like to see a break above that line, and then a move above the 0.8526 barrier, marked by the high of October 6th and the inside swing low of September 28th. This could initially open the path towards the high of October 5th, at 0.8545, the break of which could see scope for larger bullish extensions, perhaps towards the high of the day before, at 0.8573.
The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.90% of retail investor accounts lose money when trading CFDs with the Company. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please read the full Risk Disclosure.
Copyright 2021 JFD Group Ltd.