FxWirePro: EUR/GBP consolidates break above major trendline, bias higher

• EUR/GBP has recovered most of Monday's losses, is holding above 5-DMA at 0.8722.
   
• GBP under pressure after the UK Parliament passed the Brexit bill that allows PM Theresa May to trigger Article 50 (at some point in late March).
   
• The bill is expected to become law later today after receiving Royal Assent.
   
• The pair is consolidating breakout above major trendline resistance at 0.87 on Friday.
   
• Based on technical studies we see scope for further upside.
   
• At a speech on Monday, ECB President Draghi refused to speculate on the possibility of rate increases before quantitative easing ends. 
   
• He did acknowledge, however, that the balance of risks to growth has improved and the ECB’s policy committee discussed removing a reference to rates remaining “at present or lower levels.”

Support levels - 0.8764 (50% Fib retrace of 0.9225 to 0.8304 fall), 0.8713 (trendline and 5-DMA), 0.87

Resistance levels - 0.88, 0.8852 (Jan 16 high), 0.8873 (61.8% Fib)

TIME  TREND INDEX  OB/OS INDEX    

1H          Neutral                Neutral       
4H          Bullish                Overbought        
1D          Bullish                Overbought        
1W         Bullish                Neutral      

Call update: We had advised a long in our previous call (http://www.econotimes.com/FxWirePro-EUR-GBP-breaks-major-trendline-resistance-at-087-good-to-go-long-on-dips-585931).

Recommendation: We recommend holding for upside. Bullish invalidation only below 5-DMA at 0.8723.