- EUR/GBP bounced off 20-DMA support at 0.8731 on Tuesday's trade, we see weakness only on break below.
- Upside has broken above 5-DMA at 0.8779 and the pair is currently trading at 0.8827.
- Technical indicators are neutral for the day. Bearish divergence on RSI and Stochs keeps alive scope for downside.
- Break below 20-DMA support at 0.8744, raises scope then for test of 0.8648 (38.2% Fib of 0.8297 to 0.8866 rally).
- Violation at 38.2% Fib will see test of 100-DMA at 0.8614. Bearish invalidation on break above 0.8845 (channel top resistance).
- Political uncertainty in the UK after May’s deal with the DUP faltered likely to keep traders wary.
Support levels - 0.8744 (20-DMA), 0.8648 (38.2% Fib of 0.8297 to 0.8866 rally), 0.8618 (200-DMA)
Resistance levels - 0.8779 (5-DMA), 0.88, 0.8845 (channel top)
Recommendation: Wait for clear directional bias.
FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at -34.2283 (Neutral), while Hourly GBP Spot Index was at -156.585 (Bearish) at 0710 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
