- EUR/GBP is extending slide after rejection at 0.93 handle.
- The pair has slipped below 20-DMA at 0.9166 which now caps recovery in the pair.
- Bearish divergence keeps scope for downside, next major support at 0.9088 (23.6% Fib retrace of 0.83822 to 0.93064 rally) in sight.
- On the upside, the pair finds major trendline resistance at 0.9310. We see reversal only on break above.
- Brexit deadlock over the divorce bills and downbeat UK macro news, in terms of the services and construction PMI reports continue to weigh down on the pound.
- Attention now turning towards the much-awaited ECB policy decision amid increased expectations that the ECB will announce the QE tapering plans.
Support levels - 0.9088 (23.6% Fib retrace of 0.83822 to 0.93064 rally), 0.9005 (50-DMA), 0.8953 (38.2% Fib)
Resistance levels - 0.9167 (converged 5&20-DMA), 0.92, 0.9226 (Sept 4 high), 0.9310 (Trendline resistance)
Call update: Our previous call (http://www.econotimes.com/FxWirePro-EUR-GBP-fails-to-hold-above-093-handle-close-below-5-DMA-could-see-further-weakness-874643) has hit TP1&2.
Recommendation: Book partial profits. Lower trailing stop to 0.92, hold for downside.
FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at -25.3797 (Neutral), while Hourly GBP Spot Index was at 134.753 (Bullish) at 1100 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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