- EUR/GBP has been rejected at major trendline resistance at 0.8970, slips lower from session highs at 0.8967 to close at 0.8926 on Wednesday's trade.
- Price action range bound on the day. The pair made a day's high of 0.8928 and a low of 0.8917.
- Markets await European Central Bank meeting. Focus will be on staff forecasts and Draghi’s press conference.
- On the other side, the British Pound remains vulnerable ahead of the EU summit on March 22 where an EU-UK trade deal should be concluded.
- Technical studies are biased higher and we see scope for further upside on break above trendline.
- RSI is above 50 levels and Stochs show bullish momentum. We see +ve DMI dominance and MACD also supports upside.
- Break above 0.8970 (trendline) raises scope for test of 61.8% Fib at 0.9069.
- On the flipside, 5-DMA at 0.8921 is immediate support. Break below could test 200-DMA at 0.8888. Violation at 200-DMA invalidates bullish bias.
Support levels - 0.8921 (5-DMA), 0.8888 (200-DMA), 0.8867 (20-DMA)
Resistance levels - 0.8970 (trendline), 0.90, 0.9014 (Nov 15 high), 0.9070 (61.8% Fib retrace of 0.9306 to 0.8686 fall)
Recommendation: Good to go long on breakout at trendline resistance at 0.8970, SL: 0.89, TP: 0.90/ 0.9070/ 0.91.
FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at 74.1281 (Neutral), while Hourly GBP Spot Index was at 46.0805 (Neutral) at 0400 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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