- 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.
