EOD technical charts have shown down-streak after fragile PMIs in the euro zone and upbeat numbers in the UK, GBP rallies against the euro have now continued from yesterday’s close at 0.8488 to the current 0.8417 levels slipping below 7DMA.
The pair has currently broken below supports at 0.8424 level, the substance below would drag further at 0.8353 levels.
Same is the case on monthly plotting, swings are hovering and there is an attempt of break out below support at 0.8374 (78.6% fibos from the bottoms of around 0.6981 levels) and if it sustains below should be a little cause of concern.
The convergence on is seen on as it is trending below 42 levels with a supportive signal from the curve as %D line crossover near oversold zone to the consistently dipping prices would mean that there is healthy momentum in short term selling.
As a result, we saw intraday sentiments and leading indicators fortify these downswings with downward convergence.
Subsequently, 21DMA crosses over 7DMA that signals sell signal, has shown a crossover, and this lagging indicator on monthly chart still remains in the zone; so we cannot jump into the conclusion that it could be a continuation.
Well, on the broader perspectives, things seem like the euro bulls have to be given up momentum long lasting uptrend for about 5 months (see monthly charts) against sterling and losing streak now looks sturdy from last couple of days. Evidently, is appeared at peaks of 0.8488 levels and subsequently, evidencing its effects so far.
While leading indicators on monthly have been indecisive but shows an attempt of crossover in overbought territory.
Overall, we anticipate more price dips in the short run, while fresh investors with long-term motives may need to wait for a bounce back.
Well, on short term speculative grounds, buying (1%) 2w in the money puts, simultaneously shorting 1w (1.5%) out of the money puts are recommended to execute a debit put spreads at net debit.
Alternatively, on a swing trading perspective, it is smart to devise sell on rallies, thus, we advocate buying binary delta puts for minimum targets of 30-35 pips.