Fundamental factors:
- Pound Sterling underperforms in the Asian session as ‘hard-Brexit’ induced worries resurfaced.
- Focus now shifts towards release ahead of the Eurozone Sentix Investor Confidence and unemployment rate numbers.
- German trade balance data slightly better than expected, euro could garner support.
Technical Analysis:
- EUR/GBP bounces of 20-DMA at 0.8454 on Tuesday's trade (last week).
- Upside gathers steam as we head into European session.
- The pair has breached major trendline resistance and has taken out 100-DMA at 0.8626.
- Momentum studies are bullish, we see scope for test of 0.8765 (50% Fib of 0.9225 to 0.8304 fall).
- Bullish invalidation only below 20-DMA currently at 0.8481.
TIME TREND INDEX OB/OS INDEX
1H Bullish Overbought
4H Bullish Overbought
1D Bullish Neutral, Bias higher
1W Bullish Neutral , Bias higher
Support levels - 0.86, 0.8551 (5-DMA), 0.8501 (78.6% Fib)
Resistance levels - 0.8656 (61.8% Fib), 0.87, 0.8765 (50% Fib)
Recommendation: Good to go long on dips around 0.8625, SL: 0.8550, TP: 0.8660/ 0.87/ 0.8765
