The following is daily EURGBP technical analysis and near term outlook. Will we see a corrective EURGBP rally towards 0.8625 in coming days?
21 December, AtoZForex –The recovery of Euro vs Great Britain Pound after being held by a confluence support of 40-Day moving average on the weekly time frame and just a few pips shy away from 200-Day moving average on the daily time frame suggest that a corrective bounce is in the offing.
The rally from above support at 0.8332 has retained our view that further consolidation above recent low of 0.8304 would be seen and another corrective bounce to 0.8470-8500 and possibly 0.8600 cannot be ruled out. However, the corrective rally does not change the overall outlook of the EURGBP as long as resistance at 0.8630 remain intact in the course of the corrective bounce.
Daily EURGBP technical analysis 0.8625 level in focus
Our next bearish signals can be sought using Fibonacci retracement tool by connecting the September high of 0.9141 to the present low made at 0.8304. Our main focus will be the 38.2% Fibonacci retracement level which sits comfortably with the 0.8625 price level. The 38.2% Fib level with a good price action formation on the 4hr time frame should possibly present an opportunity to go short the EURGBP.
On the downside, below 0.8380 and 0.8370 regions should bring weakness to 0.8206 but beware that a break of 0.8332 (Thursday low) is needed to suggest that correction has ended and bring retest of 0.8304, break of 0.8304 would confirm corrective bounce is over and recent decline has resumed and extend weakness ultimately towards our swing targets of 0.8000, then 0.7750 in extension.
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