EUR/GBP: Forming a Probable H&S - SocGen
Research Team at Societe Generale, suggests that the EUR/GBP embarked on
a steady uptrend after testing key support at 0.70/0.68 and achieved
upper bound of a multiyear descending channel at 0.81/0.8150.
Key Quotes
“The
up move appears to have exhausted after formation of a shooting star.
Monthly RSI is approaching towards a resistance suggesting 0.81/0.8150
as an important hurdle. Only a definite close beyond this will indicate a
larger up move towards 0.8370 with next significant resistance at
August 2013 highs of 0.87.
Recently the pair has achieved the
projected potential for a double bottom. Of note is the fact that it has
completed a typical period of 7 months to a year which also finalized
recoveries since 2008. Thus, a pause is looming.
An intermittent
top appears to be in place as highlighted by weekly stochastic
indicator which is now pulling back after testing a pivotal ceiling. A
move towards 0.7650 and more importantly towards confirmation level of
the double bottom at 0.75/0.7450 looks on cards. This is likely to be a
pivotal medium term support. Short term, the pair is evolving within a
probable H&S; 0.7935/80 will be an immediate resistance.”
