Forex: The correction for EUR/GBP is not over

EUR/GBP

Analysts at Commerzbank believe that the correction for EUR / GBP is not over, suggesting that the potential peak would be around 0.8838 / 90.

Key quotes:

“Under the 0.8700 level, the market’s attention will go back to 0.8620 / 18, and if the price breaks this level, the pair is likely to continue down to 0.8545.

“The market is below the 200-day EMA, which is currently at 0.8860. A bit higher is the 55-day SMA, and along with the October peak they play a role of strong resistance.

Technical analysis: On H1 chart, the price moves on a pronounced upward trend which has started on January 25, 2019. At the same time, the price is slightly above 23.6% of Fibonacci starting from the peak formed on 03.01.2019 to the bottom at price 0.8618. Expectations are the price to test the support of the channel, which coincides with 23.6% of Fibonacci and from there to continue its upward correction to 38.2% in Fibonacci.

Indicators: On H1 chart 50 SMA and 200 EMA provide slight price support. On the H4 chart the 50 EMA is a strong support, while 200 EMA is a strong resistance.

DeM – On the H1 chart the indicator is over-sold and does not support sell-offs. On the H4 chart is in neutral territory and does not give any signals.

Aggressive entry: Buy limit order at 0.8733 with stop 0.8705.

Conservative entry: When the price makes a price action formation while testing the support line we can enter the market with a “Buy” position.

Alternative scenario: If the price breaks the trend channel + 23.6% in Fibonacci, the price will resume its downward movement to 0.8620.