Technical Analysis:
- EUR/GBP rejected at 50% Fib of 0.9225 to 0.8304 fall at 0.8765.
- The pair is trading an extremely narrow range in the Asian session.
- Immediate support is seen at 5-DMA at 0.8626.
- Trend remains higher, momentum studies remain bullish
- ADX supports uptrend, Bollinger bands are widening.
Fundamental factors:
- Pound Sterling saw massive slump across the board on renewed ‘hard-Brexit’ worries post PM Theresa May's comments.
- Pound continues to remain vulnerable to the repricing of a 'hard Brexit' scenario.
- Focus now on BOE Governor Carney’s testimony before the Treasury Select Committee on Wednesday as Brexit concerns resurface.
- UK manufacturing and industrial production data is due on cards later in the European session.
- Societe Generale says U.K. manufacturing output is likely to have recovered in Nov, predict manufacturing output to bounce by 0.7 % m/m in Nov after a fall of 0.9 % m/m in Oct
TIME TREND INDEX OB/OS INDEX
1H Neutral Neutral
4H Bearish Neutral, Bias higher
1D Neutral Neutral
1W Bullish Neutral, Bias higher
Support levels - 0.8656 (38.2% Fib), 0.8629 (100-DMA), 0.86
Resistance levels - 0.8698 (Jan 9 high), 0.87, 0.8765 (50% Fib)
Call update: Our previous call (http://www.econotimes.com/FxWirePro-EUR-GBP-breaks-100-DMA-at-08626-good-to-go-long-on-dips-478215) has achieved all targets.
Recommendation: Wait for clear indication on Technicals.
