• Last Candlesticks pattern: N/A
• ime of formation: N/A
• Trend bias: Near term up
• Last Candlesticks pattern: Shooting star
• Time of formation: 29 Aug 2017
• Trend bias: Down
EURGBP – 0.8760
Although the single currency has resumed recent reversal from 0.9703 and initial downside bias remains for weakness to 0.8690-95 (61.8% Fibonacci retracement of 0.8312-0.9307), loss of near term downward momentum should prevent sharp fall below previous support at 0.8652 and reckon 0.8600-05 would hold from here, price should stay above 0.8550-55, risk from there remains for a much-needed corrective rebound to take place later.
On the upside, whilst initial recovery to the Tenkan-Sen (now at 0.8824) and then 0.8840 cannot be ruled out, reckon resistance at 0.8899 would limit upside and bring another decline later. Above 0.8899 resistance would bring test of the lower Kumo (now at 0.8948) but a daily close above there is needed to suggest a temporary low is possibly formed, bring retracement of recent decline to 0.8970-75, then 0.9000 but reckon the Kijun-Sen (now at 0.9027) would limit upside and resistance at 0.9048 would remain intact.
Recommendation: Stand aside for this week.
On the weekly chart, as the single currency has remained under near term pressure after retreating sharply from 0.9307 and near term downside risk remains for this fall to bring retracement of recent rise, hence weakness to 0.8690-95 (61.8% Fibonacci retracement of 0.8312-0.9307) and possibly support at 0.8562 cannot be ruled out, however, reckon downside would be limited to the lower Kumo (now at 0.8571) and previous resistance at 0.8531 should turn into support and contain euro’s downside.
On the upside, expect recovery to be limited to 0.8840 and resistance at 0.8899 should hold, bring another decline later. A weekly close above said resistance at 0.8899 would bring corrective bounce to 0.8950-60 and possibly towards 0.9000 but reckon upside would be limited to the Tenkan-Sen (now at 0.9027) and bring another decline. Above 0.9105-10 would abort and risk a stronger rebound towards 0.9190-00, having said that, further strong rise above 0.9225-30 should not be repeated and price should falter well below recent high at 0.9307.