FxWirePro: EUR/GBP extends bullish run above 38.2% Fib, bias higher, stay long

Technical Analysis:

• EUR/GBP extends bullish run after break of 100-DMA at 0.8626 on Monday's trade.
• Momentum studies remain bullish, the pair has broken 38.2% Fib of 0.9225 to 0.8304 fall.
• ADX supports uptrend, Bollinger bands are widening.
• Next target for bulls is 50% Fib at 0.8765
   

Fundamental factors:

• Latest IMM data suggests GBP positioning bearish, investors extended GBP net shorts considerably.
• Pound Sterling saw massive slump across the board on renewed ‘hard-Brexit’ worries post PM Theresa May's comments.
• Some short-covering on the GBP shorts after yesterday’s massive slide cannot be ruled.
• Focus now on BOE Governor Carney’s testimony before the Treasury Select Committee on Wednesday as Brexit concerns resurface.
   

TIME    TREND INDEX    OB/OS INDEX    

1H          Bullish                    Overbought, Bias higher        
4H          Bullish                    Overbought, Bias higher                
1D          Bullish                    Overbought, Bias higher        
1W         Bullish                    Neutral, Bias higher    

Support levels - 0.87, 0.86, 0.8656 (38.2% Fib), 0.8628 (100-DMA), 0.86

Resistance levels - 0.8765 (50% Fib), 0.88, 0.8873 (61.8% Fib)

Recommendation: We had advised a long call on the pair. Recommend holding for targets.