EURGBP undecided
Updated
I don't know about you but the indecision of this pair is frustrating me. For me its 50/50 right now.
I think the only logical route is for a retest of trend support at 0.8715 highlighted by the intersection of the blue and red lines.
The price has been in a pretty steady bullish trend for just over a year now and has is in the process of printing an ascending head and shoulders on the daily - weekly TF.
The indicators show that the weakness in price is supported by an increase of bearish activity and whilst I would like to see this pair attempt to test the 0.90 area, I'm just not sure if we'll get there.
The delta shows a high level of selling, it managed to break the rising trend (RED), retest support, followed by a healthy rejection. This would indicate that we may be entering a new trend in the coming days and weeks. That being said, the continued strength in sell orders has not been reflected in price action. The last time we saw selling like this resulted in a significant move lower.
We will either have bullish market absorption which is significant enough to overcome the bearish selling pressure at the same time that the price moves to test the rising trend support (BLUE). Or the large level of market absorption we are seeing will be exhausting by continued selling pressure at the time of testing the rising trend line resulting in an impulse lower. If this happens, it will not only complete the head and shoulders pattern that's been almost a year in the making, but it will break the year long trend we've been riding which could signify a new structure being formed.
I don't see enough of a difference between the UK and EU fundamentals to give guidance and I certainly don't see us waving goodbye to inflation anytime soon, especially with OPECs latest move. So for me, it could go either way! I suspect we won't know until we have a retest of 0.8715. In my personal opinion, that's a key area to watch. It coincides with a well respected support/resistance zone for previous price movements and also the support of our long term bullish trend channel, whilst at the same time completing a reasonably reliable bearish pattern under heavy selling pressure.
I think ill take a seat on the sidelines until I have a more clear picture!
What do you think? Will the support hold or fail.
I think the only logical route is for a retest of trend support at 0.8715 highlighted by the intersection of the blue and red lines.
The price has been in a pretty steady bullish trend for just over a year now and has is in the process of printing an ascending head and shoulders on the daily - weekly TF.
The indicators show that the weakness in price is supported by an increase of bearish activity and whilst I would like to see this pair attempt to test the 0.90 area, I'm just not sure if we'll get there.
The delta shows a high level of selling, it managed to break the rising trend (RED), retest support, followed by a healthy rejection. This would indicate that we may be entering a new trend in the coming days and weeks. That being said, the continued strength in sell orders has not been reflected in price action. The last time we saw selling like this resulted in a significant move lower.
We will either have bullish market absorption which is significant enough to overcome the bearish selling pressure at the same time that the price moves to test the rising trend support (BLUE). Or the large level of market absorption we are seeing will be exhausting by continued selling pressure at the time of testing the rising trend line resulting in an impulse lower. If this happens, it will not only complete the head and shoulders pattern that's been almost a year in the making, but it will break the year long trend we've been riding which could signify a new structure being formed.
I don't see enough of a difference between the UK and EU fundamentals to give guidance and I certainly don't see us waving goodbye to inflation anytime soon, especially with OPECs latest move. So for me, it could go either way! I suspect we won't know until we have a retest of 0.8715. In my personal opinion, that's a key area to watch. It coincides with a well respected support/resistance zone for previous price movements and also the support of our long term bullish trend channel, whilst at the same time completing a reasonably reliable bearish pattern under heavy selling pressure.
I think ill take a seat on the sidelines until I have a more clear picture!
What do you think? Will the support hold or fail.
Note
We have a touch and rejection. Its too early to tell if this is a trend continuation; the rejection needs to be deeper Note
Breakout or fakeout? Although the local trend has been bearish over the past two months, the overall trend has been bullish. Over the past week we have seen the price touch a very important area (green zone), which highlights the confluence of the bullish trend support (blue), a previously well respected price point (0.8700 circa), and the upper resistance of the bullish descending triangle. Moreover, the accumulation of sell orders which have caused this local decline have been moving within a tight descending triangle. Today this descending triangle has been broken (circle). This break also corresponds with the recent breakout in price (circle).
All of these factors create a very bullish technical outlook for this pair over the coming weeks. That being said, I remain cautious and will wait for my long entry confirmation when the price pulls back to support.
Note
Despite the recent break in price I think this pair may be due a Corrective turn lower back to support, highlighted by the green zone. I believe this may be on the cards for several reasons, including but not limited to; the price approaching a technically overbought status, the price entering an important support resistance zone highlighted by the red area along with the fact that the price has also been moving inside an ascending triangle since its recent breakout. All of these points converge on an area of the chart which is bound by a descending resistance zone which was first printed back in September of 2022 following the kwartang mini budget catastrophe, and has been respected twice more in February and march or this year. it may be of little significance but I'm expecting a return to support prior to any substantial moves.Note
Following the predictable stall in price at 0.8860 (red) I'm expecting a turn lower to local resistance (blue) with a break lower to the 0.8730-50 area (green). This coincides with the support of the prevailing bullish channel (blue line).
Due to the recent inflation data coming out of the UK I feel the BoE will once again be forced to raise rates at its next policy meeting, this is contrary to a potential slowing of pace. The COT data shows an increase in long positions for both the euro and the pound, albeit at a greater pace for the euro.
The indicators shown are not suggesting any weakening in price and so for these reasons I'm expecting a continuation and retest of support shown as green on the chart. I will be looking for buy opportunities around the 0.8730-50 zone. Conversely, if the price rises to retest resistance (red) at 0.8860 I will be looking for a sell opportunity.
its important to note that I will only be looking to buy and, or, sell at these zones if the indicators shown suggest a weakening in price action by way of divergence. If I see that price action is reflected by the indicators, as I do now, this suggests a continuation in which case I will wait for confirmation.
Note
Yesterday I hoped a move lower would have provided a good long opportunity. Instead the price moved higher. I also said that if the price did move higher, I would be looking for sell positions around the 0.8860-80 area if I saw evidence of weakness. Today I see weakness.The price is currently overbought and moving within an ascending triangle which can often signify a correction is due. I'm also seeing evidence of weakness being reflected in the indicators by way or moderate divergence. The ration of long to short positions is also moving within the confines of a bearish bearish patter. All of these points seem to converge at a crucial point of previous resistance (red). For these reasons I'm expecting the price to make a turn for previous support around the 0.88 area. I will be looking for cautious short positions whilst keeping my eye out for any continuation in strength.
Trade safe!
Note
I think a test of local support and rising trend line support (blue and green respectively) is most likely. If the price holds then I think it may very well overcome the resistance at 0.8860 (red)
If it fails then a retest of 0.8791 is on cards with a potential test of the prevailing bullish trend line at 0.8750 (blue)
Fundamentally, next week is pretty quiet for the most part, aside from Fridays anticipated GDP increase and an expected downturn in German inflation. The market reaction to the increase in UK inflation was remarkably underwhelming which would indicate that euro bulls are gathering pace.
Anywhoo, this thread is old and long so I'm shutting it down. For me, a test of the 0.8815 area will be very telling!
Trade safe:)
Note
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.