EUR/GBP Turns Negative, 0.7770 Support on Test

EUR/GBP Turns Negative, 0.7770 Support on Test

25 April 2016, 14:44
Roberto Jacobs
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EUR/GBP Turns Negative, 0.7770 Support on Test

The EUR/GBP pair's bounce off day's low got rejected at 0.7800 handle, dragging the pair back towards a short-term descending trend-channel support near 0.7770 level.

On Monday, the pair managed to recover gap down opening below the trend-channel support to reclaim 0.7800 mark but failed to extend the momentum. The pair subsequently reversed all of its gains to drop back and retest the descending trend-channel support.

Technical levels to watch

Reversal from immediate resistance level and subsequent retest of a short-term descending trend-channel support points to extension of the pair’s near-term weakness. However, it would be prudent to wait for a decisive break below the channel support.

A follow-up selling pressure, dragging the pair below trend-channel support, would confirm a break-down, which could now trigger a fresh leg of weakness initially towards 0.7735 intermediate support, before eventually dropping to March daily closing lows support near 0.7715 region.

On the upside, 0.7800-0.7815 area now becomes immediate strong resistance and only a sustained strength above 0.7800 mark handle would bring 0.7850 resistance back in action.


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