Accelerated rally: EUR/GBP has been a monster and deserves a look in the larger time-frame. Looking at the weekly chart, you can see a rally that started in July from the 0.7756 low that has accelerated once it broke above a falling trendline, and the completion of an inverted head and shoulders. The past 3 weeks, have seen this pair rally from 0.8080 to now above the 2012 high after breaking above 0.8505.
200-week SMA: As this trading week ends, the 200-week SMA is probably going to hold. The market will start the next week looking at EUR/GBP with bullish momentum in the weekly chart as the RSI kisses 70.
Resistance? We may have already entered a bull trend that could last the year, though this parabolic state of rally should lose steam soon. This is a market where all signs are bullish, but it has reached levels that might provide supply between the 200-week SMA and the 61.8% retracement at 0.8576. Will these factors be enough for the market to enter into a period of consolidation, or correction?
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.