EUR / GBP weakness has intensified after breaking the uptrend of 0.8966 / 46, which had been coming since the end of April, as well as significantly the 200-day average, analysts at Credit Suisse note. They estimate that if they lose 0.8866 / 64, an important ceiling would be established.
Key statements:
“EUR / GBP weakness has been drastically accelerated not only by a clear break in the uptrend at the end of April and the recent low at 0.8966 / 46, but also and more importantly and on a closing basis, the 200-day average at 0.8926. This should further heighten the outlook that we are in the process of seeing a major bullish reversal for the British pound, with the now critical price pivot at 0.8866 / 64 ”.
“Ultimately, we hold the view that the 0.8866 / 64 zone should be broken to suggest that we are looking at a full major top to convert the central trend to bearish. Then we would initially see support at the low from late April at 0.8671, then the neckline to the late 2019 / early 2010 base at 0.8609, with the ‘maximum measured target’ seen at 0.8436 “.
“Resistance is seen at 0.8940 / 46 initially, then at 0.8984, con a bearish outlook as long as it is below 0.9070“.
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Credits: Forex Street
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