Bears extend into third straight day and emerge below thick daily cloud on Thursday, currently pressuring 100DMA (0.8941), above which the price action stayed for six months
The cross registered strong gains after breaking above 100DMA that implies similar reaction on break below.
Weak daily studies support the action which needs close below daily cloud and nearby 10 July low at 0.8937, to generate bearish signal and open way towards target at 0.8864 (9 June low) with stronger bearish acceleration to bring in focus 200DMA (0.8771).
Solid resistances at 0.8969/82 (11 Aug low / broken Fibo 38.2% of 0.8670/0.9175) are expected to cap upticks and maintain negative tone.
Sterling remains inflated by weak dollar, with little negative impact from fundamentals and Brexit uncertainty so far, but traders remain cautious ahead of September flows as UK farmers convert EU subsidies into sterling and European central bank buys EURGBP to convert UK’s contribution to the union.
The pair is on track to end the second consecutive month in red that adds to downside pressure, following monthly bearish engulfing that was completed in July.
Res: 0.8969, 0.8982, 0.9006, 0.9028
Sup: 0.8941, 0.8923, 0.8912, 0.8864
