EURGBP’s bullish movement from the April 18 low of 0.8313 extended to as high as 0.8866. After touching the resistance of the January 16 high of 0.8851, the pair pulled back and formed a sideways movement in a trading range between 0.8719 and 0.8866.

On the upside

There is an ascending price channel with support at its bottom trend line on the 4-hour chart. As long as the pair is in the channel, the pullback from 0.8866 could be treated as consolidation of the uptrend and another rise to test the 0.8851 resistance is still possible.

As discussed before, EURGBP might be forming a double bottom pattern on its daily chart, with neck line resistance at the January 16 high of 0.8851. A clear break out of this level will confirm that a long term bullish movement is in order, and the measured move target would be at around 0.9400.

On the downside

Near term support is at the bottom trend line of the price channel on the 4-hour chart, a clear below the channel support could take price to the key support level at 0.8649. Below this level will indicate that the bullish movement from 0.8313 had completed at 0.8866 already. This could trigger another fall to retest the support at the December 2016 low of 0.8304.

Technical levels

Support levels: 0.8715 (the bottom trend line of the channel on 4-hour chart), 0.8649 (the June 8 low), 0.8304 (the December 2016 low).

Resistance levels: 0.8851 (the January 16 high), 0.9305 (the October 2016 high).

This article is written by Franco Shao, a senior analyst at ForexCycle.

© 2017 Copyright Franco Shao - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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