E-mail:    

CURRENCY ANALYSIS

Majors report EUR/GBP

The downward trend of Euro/Sterling, that has been developing since the end of 2008’s peaks around 0.9800,  brought the cross to a bottom at 0.7755 at the end of July 2012. From such bottom a strong rally pushed the cross back to a peak at 0.8815 on February 25th, 2013, a resistance tested again in July-August 2013. Since August a strong correction has brought the cross below the 0.8200 support, reaching a low in the last days around 0.7960. 
 
Last months’ market action confirms the technical picture’s persistent weakness. As long as the cross stays below 0.8500, the trend for the coming weeks remains bearish, with first important target the key support of end-July 2002’s lows around 0.7755. A break below such support would provide a bearish signal for the coming months too, targeting first 0.7500 and then the strong support in area 0.7200/50. The sentiment would improve with a fast recovery above 0.8500 (premature) but a bullish signal would only provided with the overcome of the strong resistance area 0.8815/50 (not very likely), with extensions towards 0.9100/50. For a strategic bullish signal an overcome of the key resistance area 0.9100/50 remains necessary (unlikely).
 

currency analysis Eur Gbp

 

 

TREND

SUPPORTS

SPOT PRICE

RESISTANCES

Trend 3-6 months

down

S1

0.7950

 0.7993

R3

0.9100/50++

Trend 6-12 months

down

S2

0.7755++

R2

0.8815/50+

Trend 12-18 months

down

S3

0.7690+

R1

0.8500+

 

Maurizio Milano