EUR/GBP traded lower yesterday, but the slide was stopped year the 0.8320 zone, also marked by the low of March 28th. Overall, the pair appears to be in a short-term downtrend since March 31st, but before we get confident on larger declines, we would like to see a decisive break below the key zone of 0.8310, which supported the pair in numerous occasions since the beginning of the year.
Such a break will confirm a forthcoming lower low on both the 4-hour and daily charts and may initially open the path towards the 0.8275 barrier, marked by the low of March 3rd. The bears may decide to take a break after hitting that zone, thereby allowing the rate to rebound somewhat. However, as long as the rebound stays limited near the 0.8310 territory, we would expect another round of selling and, eventually, a dip below 0.8275. This could carry larger bearish implications and perhaps set the stage for the 0.8220 barrier, marked by an intraday swing low formed on March 7th, or even the low of that same day, at around 0.8200.
Shifting attention to our short-term oscillators, we see that the RSI, already below 50, has turned down again, while the MACD lies slightly below both its zero and trigger lines, pointing down as well. Both indicators detect downside speed and support the notion for further declines in this exchange rate. Nonetheless, as we already noted, we prefer to wait for a strong break below 0.8310.
We will abandon the bearish case and start examining a decent round of advances in case we see a break above Monday’s peak of 0.8380. This will confirm a forthcoming higher high on the 4-hour chart and may also signal the completion of a failure swing bottom. The bulls could then get encouraged to climb towards the 0.8410 level, marked by the low of April 1st, the break of which could aim for the 0.8440 zone, marked by the high of that day. Now, in case the bulls do not stop there either, bigger advances may be on the cards, perhaps towards the 0.8483 zone, defined as a resistance by the high of March 29th.
Disclaimer:
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. 73.82% 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 2022 JFD Group Ltd.