EUR/GBP: Much like Cable, I could have chosen an easy option and written that the market was neutral. Despite Jan’s aberration on the upside, we are moving sideways centred on the Nov 2016 – Dec 2016 50% Fib at 0.8577 currently acting as support. I could add further that it seems the Medium MA (currently 0.8655) is going sideways and acting as resistance and the Long MA (currently 0.8433) is an untested support. However, that is not the whole story though all of it is true.
My suggestion is that the Long MA is far stronger than the Medium MA. For instance, it has not been tested since Dec 2015 – yet it exerts upward forces as we saw back in Dec 2016. The medium MA has been penetrated as recently as last month.
Additionally, we have two consecutive closes back over the 50% Fib at 0.8577 (just, but seemingly enough). I also draw your attention to the 26th of Dec – I’m not sure what it means yet but having the key 50% Fib at 0.8577 on that day see a crossover of the bearish Andrew's and Schiff pitchforks at the level PLUS the start of a separate bullish Schiff pitchfork at that date and at that level. It’s freaky, and it was an indecisive doji cross on that day as well.
So overall, I’m suggesting we might have a likely try higher than lower or even sideways at the moment. However, I do not think any move up has the ammunition to go much beyond the 0.8710 – 0.8750 area at this moment. Hence the mildly bullish bullet point above.
Resistance is at 0.8642, 0.8655(dynamic), 0.8690, 0.8708, 0.8755, 0.8803, 0.8834 and 0.8853.
Support is at 0.8577, 0.8552, 0.8512, 0.8490, 0.8482, 0.8467, 0.8446 and 0.8433.
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