FxWirePro: EUR/GBP extends weakness below 200-DMA, scope for test of 78.6% Fib at 0.8723

EUR/GBP chart on Trading View used for analysis

• EUR/GBP resumes weakness and is currently trading at 0.8766 at the time of writing.
   
• Euro lost ground across the board after reports signalled that the ECB considers new TLTRO.
   
• We see some recovery from ECB led losses, but upside lacks traction. European politics and the potential for a more cautious ECB suggests bias skewed to the downside.
   
• The pair has been rejected shy of daily cloud and has retraced below 200-DMA.
   
• Technical indicators are not supportive of upside. Bias to remain bearish as long as pair holds below 200-DMA.
   
• RSI below 50, bias lower. Stochs support bearish momentum and MACD is showing a bearish crossover on signal line.
   
• We see scope for test of 78.6% Fib at 0.8722. Violation there could see dip till 0.8675 (88.6% Fib).

Support levels - 0.8723 (78.6% Fib), 0.8706 (Lower BB), 0.8675 (88.6% Fib)

Resistance levels - 0.88, 0.8812 (20-DMA), 0.8836 (200-DMA)

Recommendation: Good to go short on rallies around 0.8770/80, SL: 0.8825, TP: 0.8725/ 0.87/ 0.8675.

For details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.