chart of the day eurgbp back at ascending channel support 2693832017

Short-term technical outlook on EUR/GBP

(Click to enlarge charts)

Key technical elements

• The recent pull-back in price action has stalled at the lower boundary of a short-term ascending channel in place since 10 May 2017 minor swing low now  support at 0.8717(see 1 hour chart).
• The aforementioned ascending channel support of 0.8717 also confluences with a Fibonacci cluster (23.6% retracement of the on-going up move from 19 April 2017 low to 13 June 2017 high & the 1.00/1.236 projection of recent decline from 13 June 2017 high).
• Momentum indicators have turned positive as the daily RSI oscillator has managed to stage a rebound at its corresponding pull-back support at the 55% level. In addition, the shorter-term hourly RSI oscillator has flashed a prior bullish divergence signal on last Friday, 16 June. These observations suggest that the downside momentum of the recent decline has started to ease.
• The significant short-term resistance stands at 0.8850/60 which is defined by the range top in place since 16 January 2017 (see daily chart).

Key levels (1 to 3 days)

Pivot (key support): 0.8717

Resistances: 0.8770 & 0.8850/60

Next support: 0.8640/15

Conclusion

As long as the 0.8717 short-term pivotal support holds and a break above 0.8770 (minor descending trenline from 13 June), the EUR/GBP is likely to see a potential short-term recovery to retest the 0.8850/60 medium-term range resistance in the first step.

However, failure to hold above 0.8717 may see a deeper corrective decline towards the next support at 0.8640/15 (the lower boundary of a long-term ascending channel in place since 17 November 2015 low).

Charts are from eSignal

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