EUR/GBP rally post ECB capped below cloud, downside risk remains
EUR/GBP cross topped out around 0.7250 Thursday after big squeeze on EUR shorts after ECB disappoints markets with bare-minimum easing package
Rally in the cross post ECB was capped below the daily cloud which is encouraging enough for a resumption of the downtrend
On the day, the pair has failed once again at higher levels and dropped below 0.72 handle, is currently pared some losses and is trading at 0.7201
Support on the downside is thin until the 10/21 DMAs at 0.7075/0.7064, break below could open up lower levels again. Immediate resistance is seen at 0.7236 (50 % Fibo of Oct 13 to Nov 17 fall)
Markets see scope for further ECB easing in March and BoE rate hike likely in 2016. Contrasting ECB/BoE monetary policy outlooks may keep cross largely contained below 0.7250 (Oct 28 high)
Resistance Levels:
R1: 0.7236 (50 % Fibo of Oct 13 to Nov 17 fall)
R2: 0.7262 (Cloud base)
R3: 0.7284 (Daily Cloud Top)
Support Levels:
S1: 0.7176 (38.2 % Fibo of Oct 13 to Nov 17 fall)
S2: 0.7077 (10 DMA)
S3: 0.7066 (21 DMA)
Rally in the cross post ECB was capped below the daily cloud which is encouraging enough for a resumption of the downtrend
On the day, the pair has failed once again at higher levels and dropped below 0.72 handle, is currently pared some losses and is trading at 0.7201
Support on the downside is thin until the 10/21 DMAs at 0.7075/0.7064, break below could open up lower levels again. Immediate resistance is seen at 0.7236 (50 % Fibo of Oct 13 to Nov 17 fall)
Markets see scope for further ECB easing in March and BoE rate hike likely in 2016. Contrasting ECB/BoE monetary policy outlooks may keep cross largely contained below 0.7250 (Oct 28 high)
Resistance Levels:
R1: 0.7236 (50 % Fibo of Oct 13 to Nov 17 fall)
R2: 0.7262 (Cloud base)
R3: 0.7284 (Daily Cloud Top)
Support Levels:
S1: 0.7176 (38.2 % Fibo of Oct 13 to Nov 17 fall)
S2: 0.7077 (10 DMA)
S3: 0.7066 (21 DMA)
