- The pound rose overnight across the board on the back of reports about a potential deal on the Brexit bill.
- EUR/GBP slumped below 0.89 handle to hit lows of 0.8847, pared some losses to close at 0.8873.
- The pair is on the day extending break below 50-DMA at 0.8877, bias bearish.
- Technicals on intraday charts have turned bearish, RSI and Stochs are pointing south.
- Scope for test of 200-DMA at 0.8792, violation there could see test of 0.8730 (trendline).
- On the flipside, we see bearish invalidation only on break above 100-DMA at 0.8955.
Support levels - 0.8811 (Nov 10 low), 0.8792 (200-DMA), 0.8730 (trendline)
Resistance levels - 0.8885 (20-DMA), 0.8902 (5-DMA), 0.8920 (38.2% Fib retrace of 0.8297 to 0.9306 rally),
Recommendation: Good to go short around 0.8870/80, SL: 0.8920, TP: 0.8820/ 0.88/ 0.8730.
FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at -28.6365 (Neutral), while Hourly GBP Spot Index was at 105.839 (Bullish) at 0640 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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