- Last Candlesticks pattern: Hammer
- Time of formation: 27 June 2010
- Trend bias: Sideways
Daily
- Last Candlesticks pattern: Shooting star
- Time of formation: 13 Oct 2009
- Trend bias: Up
EURGBP – 0.8309
Euro’s rebound from 0.8143 is slightly stronger than expected and near term upside risk is seen for gain to the Ichimoku cloud bottom (now at 0.8363) and then 0.8383 (61.8% Fibonacci retracement of 0.8532 to 0.8143), however, the upper Kumo (now at 0.8421) should attract renewed selling interest and bring another decline later. A daily close below the Tenkan-Sen (now at 0.8235) would revive our bearishness and bring another fall towards 0.8143. Looking ahead, once this support is penetrated, this would signal the correction from 0.8067 has indeed ended at 0.8532 and bring resumption of early downtrend for retest of this level later this month.
On the upside, a daily close above the Ichimoku cloud top (now at 0.8421) would dampen our bearishness and prolong choppy consolidation, then another corrective rise towards 0.8532 resistance cannot be ruled out, however, break there is needed to bring stronger retracement of early downtrend towards 0.8608-09 (100% projection of 0.8067 to 0.8532 measuring from 0.8143 and 50% Fibonacci retracement of 0.9150 to 0.8067).
Recommendation: Exit short entered at 0.8300 and look to sell euro again at 0.8400 for 0.8250 with stop above 0.8470
On the weekly chart, despite falling marginally to 0.8143 last week, the subsequent rebound from there just brought test of the Tenkan-Sen and consolidation with mild upside bias would be seen and recovery to 0.8380/85 (61.8% Fibonacci retracement of 0.8532 to 0.8143) cannot be ruled out, however, reckon upside would be limited to 0.8400/10 and resistance at 0.8532 should continue to hold, bring another decline later. Break of said support at 0.8143 would revive our bearish view that correction from 0.8067 has ended at 0.8532 and bring resumption of medium term downtrend for retest of 0.8067, then to 0.7991-0.8000 (50% projection of 0.9150-0.8067 measuring from 0.8532 and psychological support) but reckon 0.7839 (1.618 times projection of 0.9413 to 0.8063 measuring from 0.9150) would hold from here.
On the upside, above 0.8415/20 would risk another test of 0.8532 but only break of latter level would signal a temporary low has been formed at 0.8067 and bring retracement of recent decline to 0.8601-09 (current level of the Kijun-Sen, 100% projection of 0.8067 to 0.8532 measuring from 0.8143 and 50% Fibonacci retracement of 0.9150 to 0.8067) but reckon 0.8740 (50% Fibonacci retracement of 0.9413-0.8067) would hold from here.
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