EUR/GBP Nose-Dives to a Fresh Three-Week Low

EUR/GBP Nose-Dives to a Fresh Three-Week Low

18 May 2016, 14:19
Roberto Jacobs

EUR/GBP Nose-Dives to a Fresh Three-Week Low

The EUR/GBP pair extended its slide further below 0.7800 handle after the latest 'Brexit' poll results showed 'Remain' camp holding their lead.

Earlier on Wednesday, the pair delivered a muted reaction to stronger UK jobs report, but still remained in the vicinity of 0.7800 handle. Following the poll results, the pair reversed sharply from 0.7820 level and dropped to a fresh three-week low level of 0.7763.

From technical perspective, the pair is currently trading around a short-term ascending trend-line support (extending from Feb. through lows tested in March and April) near 0.7765-60 area. A clear break below this immediate support would trigger a fresh leg of weakness for the pair.

Technical levels to watch

Weakness below 0.7765-60 support seems to drag the pair immediately towards April lows support near 0.7740-35 zone. Moreover, below 0.7765-60 the pair would remain vulnerable to extend its downward trajectory towards 0.7700 round figure mark support.

On the flip side, any attempts of recovery might now face immediate resistance near 0.7800 handle and even if the pair manages to clear this immediate hurdle, any further recovery might now be capped at the near-term trading range break-down point, now turned strong resistance, near 0.7840-50 region.


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