The EUR/GBP printed one of the largest bullish daily candles yesterday in about a month, but is this the start of a new Bullish movement or will we drift lower again and maintain the daily triangle formation? Price halted its march north yesterday in line with recent descending highs to provide the third touch of a descending trend line, one that forms a triangle when combined with the rising trend line from the higher lows below. The high also kissed the Weekly R2 at 0.8585 before pulling back but not necessarily reversing just yet, or at all. A daily close above 0.8600 could bring the bulls running towards the Weekly R3/Monthly R1 at 0.8625 (+/-), and area the provided support & resistance through the latter half of February and first half of March. Support is pretty solid below too at 0.8540, the lows for the entire last week of May more or less. At this point, the bulls do seem to have more control, but I for one am not convinced by the political posturing that brought this on yesterday after Draghi’s comments and the market’s pessimism of relatively good UK data for the Sterling. Be careful with this one!
Happy Trading