FxWirePro: EUR/GBP breaks below 50-DMA, dip till 61.8% Fib at 0.8682 likely

• EUR/GBP on track to close in the red for a 2nd consecutive week.
   
• The pair has broken support at 50-DMA at 0.8839, raising scope for further downside.
   
• EUR dented after top ECB policymakers this week said they would end the stimulus only after inflation shows a sustained rise towards the 2 percent inflation target.
   
• Technical indicators are biased lower. RSI sharply lower, holds below 50 levels.
   
• Momentum studies are weak. Stochs point south and MACD is showing a bearish crossover on signal line.
   
• Break below 50-DMA raises scope for test of 61.8% Fib retrace of 0.8297 to 0.9306 rally at 0.8682.
   
• On the flipside decisive breakout above channel top would invalidate bearish bias.

Support levels - 0.8811 (cloud base), 0.88 (50% Fib retrace of 0.8297 to 0.9306 rally), 0.8682 (61.8% Fib)

Resistance levels - 0.8839 (50-DMA), 0.8851 (5-DMA), 0.8890 (channel top), 0.8920 (38.2% Fib)

Call update: Our previous call (https://www.econotimes.com/FxWirePro-EUR-GBP-finds-support-at-50-DMA-at-08841-break-below-will-see-further-weakness-1203892) is progressing well.

Recommendation: Bias lower. Hold for targets.

FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at -23.4338 (Neutral), while Hourly GBP Spot Index was at 147.662 (Bullish) at 0940 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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