EUR/GBP outlook: Overbought conditions warn of correction of steep three-day rally

Slobodan Drvenica Windsor Brokers

EUR/GBP

EUR/GBP – strong three day rally (the cross was up 2.1%) started to lose traction after hitting fresh high of nearly three months on Monday (0.8596).

Overbought daily studies warn of partial profit taking following steep ascend, which will mark positioning for fresh push higher.

Broken 200DMA offers initial support at 0.8558), followed by more significant top of thick daily cloud (0.8520) which should ideally contain pullback., though deeper dips cannot be ruled out and expected to find footstep at 0.8500 zone (broken 100DMA / former top of July 1).

Caution on dip below cloud base (0.8466) which would sideline bulls.

Res: 0.8596; 0.8620; 0.8643; 0.8682.
Sup: 0.8558; 0.8520; 0.8490; 0.8461.

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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