Technical Analysis:
- EUR/GBP extends bullish run after break of 100-DMA at 0.8626 on Monday's trade.
- Momentum studies remain bullish, the pair has broken 38.2% Fib of 0.9225 to 0.8304 fall.
- ADX supports uptrend, Bollinger bands are widening.
- Next target for bulls is 50% Fib at 0.8765
Fundamental factors:
- Latest IMM data suggests GBP positioning bearish, investors extended GBP net shorts considerably.
- Pound Sterling saw massive slump across the board on renewed ‘hard-Brexit’ worries post PM Theresa May's comments.
- Some short-covering on the GBP shorts after yesterday’s massive slide cannot be ruled.
- Focus now on BOE Governor Carney’s testimony before the Treasury Select Committee on Wednesday as Brexit concerns resurface.
TIME TREND INDEX OB/OS INDEX
1H Bullish Overbought, Bias higher
4H Bullish Overbought, Bias higher
1D Bullish Overbought, Bias higher
1W Bullish Neutral, Bias higher
Support levels - 0.87, 0.86, 0.8656 (38.2% Fib), 0.8628 (100-DMA), 0.86
Resistance levels - 0.8765 (50% Fib), 0.88, 0.8873 (61.8% Fib)
Recommendation: We had advised a long call on the pair. Recommend holding for targets.
