How Committed Are Short Term EUR/GBP Bulls?

The FX Specialist view - Following an earlier downmove in EUR/GBP this year a s/term July bounce soon ran out of steam. Now those temporary bulls could be returning, but their interest will be questionable until certain key resistance can be overcome.

• MONTLHY CHART: A bear signal was given after the break of the long term 38.2% level and Jun-09 low just under 0.8400. Current focus is on the 0.8168 50% pullback level, so far providing temporary support. Lower levels are likely in due course.
• WEEKLY CHART: Breaks of the rising support lines and 0.8397 Jun-09 low implied the longer term chart had topped out. Support from a 76.4% retracement level at 0.8190 was eroded, but only briefly so far.
• DAILY CHART: The recent pullback from just above a 38.2% recovery level has found support from a s/term 76.4% level (which coincides with the longer term 76.4% level). In the Commodity Specialist Guide we have maintained an overall bear stance, but a recovery through the bear channel top projection and also 0.8532 19-Jul high would be bullish. In this event bear momentum would have diminished for the time being, with a better recovery phase then signalled. A clear breach of the current 76.4% support should herald clear new 2010 lows.

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