EURGBP sharply reversed the initial reaction to Trump’s victory, collapsing through recent range supports in the 0.8865- 0.8850 region.
That area now becomes resistance and while under this we can see the market grinding down towards next supports in the 0.7845-0.8690 region.
A rally back through interim resistance would reduce the immediate bear bias and leave us back in a range environment for now.
However, on weekly plotting, the gravestone doji appears at peaks of 0.90 level that has been evidencing bearish effects.
RSI: Downward convergence on both daily as well as weekly signals the strength in the bearish trend.
Stochastic: %D crossover on daily terms even below oversold region still signals the bearish momentum.
MACD: Bearish crossover indicates the price declines likely to extend.
As a result, at current juncture contemplating above bearish indications, we encourage shorting futures contract of near month expiries for target towards 0.8690 or even0.7845 levels cannot be ruled out upon breach of 1st targets in near terms.
Writers in a futures contract are expected to maintain margins in order to open and maintain a short futures position.
These margin requirements are determined by the exchanges and would usually be ranging from 2 to 10% of the full value of the futures contract.
