EUR/GBP Recovery Repelled by Key Resistance

The FX Specialist view - Following the earlier fall in the EUR/GBP cross a recovery phase has been in process since the June low. However, this has now seen a test of a key resistance area, with the market accordingly pulling back.

• MONTLHY CHART: Prior breaks of support signalled a medium term bear move underway, with a 50% pullback level providing effective support. The current rally is presumed temporary – note resistance here from the old triangle underside has now been tested – so far, s/term reaction here has been negative.
• DAILY CHART: The continuing bull run has now tested the 76.4% recovery which is providing s/term resistance. This ties in with resistance from the weekly chart, so a pullback is not a surprise at this stage. Note support offered by the 0.8532 Jul high, while longer term bears will be looking for a continuation lower and through the more key support area of 0.8400, prior s/term high and bull channel base projection. Violating this latter would imply bulls had lost their momentum.

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