chart of day eurgbp ascending channel support bearish breakdown 1855432017

In our previous “Chart of day” article dated on 20 June 2017, the EUR/GBP had rallied as expected and met its short-term resistance at 0.8850. Click here for a recap.

Let’s us now examine its latest technical elements.

Short-term technical outlook on EUR/GBP

(Click to enlarge charts)

Key technical elements

• The EUR/GBP has managed to stage a retreat right at the 0.8850/67  medium-term range top/resistance in place since 16 January 2017 (see daily chart).
• In the shorter-term, the cross pair has staged bearish breakdown below its ascending channel support from 10 May 2017 minor swing low now turns pull-back resistance at around 0.8850 (see 1 hour chart).
• The significant short-term resistance stands at 0.8867 which is defined closely by the aforementioned pull-back resistance of the former ascending channel support and the minor swing high areas of 13 June/28 June 2017.
• The significant short-term support rests at the 0.8665/45 zone which is defined by the lower boundary of a longer-term major ascending channel in place since 17 July 2015 low, the minor swing low congestion area of 30 May/09 June 2017 and a Fibonacci cluster (see daily & 1 hour charts).
• The daily RSI oscillator remains below its corresponding descending trendline resistance and still has room to manoeuvre to the downside before it reaches its first support at the 40% level. These observations suggest the lack of upside momentum of price action.
• The hourly Stochastic oscillator still has some room left to manoeuvre to the upside before it reaches an extreme overbought level. These observations suggest a potential minor push up to retest the near-term/intermediate resistance of 0.8810 at this juncture.

Key levels (1 to 3 days)

Intermediate resistance: 0.8810

Pivot (key resistance): 0.8810

Supports: 0.8720 & 0.8665/45

Next resistance: 0.9110

Conclusion

The short-term uptrend of EUR/GBP in place since 19 April 2017 low has been damaged. Right now, the EUR/GBP faces the risk of a short-term retracement/decline to target the supports at 0.8720 before 0.8665/45 as long as the 0.8867 pivotal resistance is not surpassed.

However, a clearance above 0.8867 is likely to invalidate the preferred bearish bias to see a continuation of its bullish impulsive upleg towards the next resistance at 0.9110  next in the first step

Charts are from eSignal

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