December was a big month for the euro cross. First, the cross was painted red candles for four straight months, which was not seen since March 2015. Second, post UK election the cross beaten down to sub-0.8300 levels but managed to hold the 100MA (monthly).
On December 17th, we forecasted that the short-term trend of EURRGBP indicates it is on the verge of another downward journey, whereas the cross failed to break the 0.8270 level to open up more fatal flaws.
As a result, we saw a big V shape recovery and managed to settle above 20MA. Now it remains critical for the cross to sustain above 0.8600 levels to retain an optimistic outlook.
The daily indicators have picked up, and the weekly oscillator is close to the bullish turnaround. Against this setting, the cross is seemed to recover to 0.8600 ahead of the resistance at 0.8630 levels.
Note that only a break of these last barriers would lessen the risks of a dip back to important support located at 0.8500 and 0.8470 levels. We suggest traders keep an eye on the resistance, a breakout above these levels would strengthen the upward momentum with a new target the resistance levels around 0.8700 and 0.8800.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
What is your Technical View?
Do you have a different idea? Please leave us a comment and get an answer from our professional analysts.