EUR/GBP Challenging 100-DMA Support Near 0.7800 Handle

EUR/GBP Challenging 100-DMA Support Near 0.7800 Handle

10 June 2016, 08:42
Roberto Jacobs
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EUR/GBP Challenging 100-DMA Support Near 0.7800 Handle

The shared currency continued with its underperformance against the British Pound on Friday, with the EUR/GBP cross now moving back to 0.7800 handle.

Earlier during the week, the pair witnessed some volatile moves on diverging poll results for the upcoming UK-EU referendum on June 23. The pair had a weekly gap-up opening on Monday, which quickly got erased on Tuesday before the pair stabilized around 100-day SMA near 0.7800 region.

Despite of the weakening trend for second consecutive day on Friday, the pair remains well within this week's trading range but remains vulnerable to sudden turnaround in the sentiment surrounding the shared currency. However, 'Brexit' worries might continue capping any sharp appreciating move for the British Pound, thus limiting near-term downside for the EUR/GBP cross.

Technical levels to watch

Weakness back below 0.7800 region (100-day SMA) is likely to find support near weekly swing lows near 0.7750 level, which is closely followed by support near 0.7730 horizontal area. A break below 0.7730 support now seems to force the cross to extend its weakening trend towards retesting 0.7665-60 strong support.

Conversely, on a sustained move above 0.7860 immediate resistance the pair is likely to make a fresh attempt to reclaim 0.7900 handle, which if conquered should assist the pair towards testing May highs resistance near 0.7945-50 zone.


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