FxWirePro: Cloud caps recovery in EUR/GBP, breakout above 0.8884 to see further upside

• The single currency buoyed following the release of the German ZEW survey which were upbeat across all indicators.
   
• The headline economic sentiment rebounded sharply in Sept, coming in at 17.0 versus 12.5 expectations and 10.0 seen last.
   
• The sub-index current conditions unexpectedly rose to 87.9 versus 86.6 expected and 86.7 booked previously.
   
• EUR/GBP up 0.26% on the day, hovers around 100-DMA at 0.8863. Close above could invalidate bearish bias.
   
• Daily cloud also offering strong resistance at 0.8884, breakout above to see further upside. Scope then for retrace upto 20-DMA at 0.9102.
   
• On the flipside, close below 100-DMA at 0.8863 cloud see drag till 200-DMA at 0.8705.

Support levels - 0.8863 (100-DMA), 0.88, 0.8735 (61.8% Fib retrace of 0.83822 to 0.93064 rally), 0.8705 (200-DMA)

Resistance levels - 0.8884 (converged cloud base and 5-DMA), 0.89, 0.8953 (38.2% Fib retrace of 0.8382 to 0.9306 rally)

Call update: Our previous call (http://www.econotimes.com/FxWirePro-EUR-GBP-plunges-to-8-week-lows-08866-after-pound-spikes-on-hawkish-BoE-finds-strong-support-at-W-20-SMA-901797) has hit TP1.

Recommendation: Exit trade at lows. Watch out for breakout above 0.8884 for bearish invalidation.

FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at 75.8678 (Neutral), while Hourly GBP Spot Index was at 164.065 (Bullish) at 1040 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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