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Technical Analysis – EUR/GBP hits a 10-month high; RSI overbought

EUR/GBP 08/08/18 | EconAlerts


EUR/GBP has risen sharply from its lowest since around mid-July of 0.8854 touched last week. Earlier on Wednesday, it posted a 10-month high of 0.9016, while it is currently trading not far below that zenith.

The positively aligned Tenkan- and Kijun-Sen lines are acting as a testament to the bullish momentum, though the Chikou Span may be hinting to an overbought market; a correction to the downside in the near-term is not to be ruled out. The RSI, which continues to rise in bullish territory, is also supporting the case for a positive bias, though by being in overbought territory above 70 it also lends credence to the aforementioned signal given by the Chikou Span.

Further gains may meet a barrier around 0.9032 – this being the pair’s highest in 11 months –, with steeper advances bringing into scope the 0.91 round figure.

On the downside, support may come around 0.8957, this being a previous peak with the area around it encapsulating another top from early March. Further below, support could be met around the current levels of the Tenkan- and Kijun-Sen lines at 0.8935 and 0.8908 respectively; the region in between the two captures numerous peaks from the past.

Turning to the medium-term picture, it appears positive: trading activity is taking place above the 50- and 100-day moving average lines, confirming the signal given by the bullish cross recorded in early July when the 50-day MA moved above the 100-day one.

Overall, both the short- and medium-term outlooks are looking bullish, though the possibility of overbought conditions in the near-term justifies some caution.

EUR/GBP 08/08/18 | EconAlerts

 

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Disclaimer:
This information is not considered as investment advice or investment recommendation but instead a marketing communication. This material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.


source: XM

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