Previous: EUR/GBP – Pullback Finds Resistance at Previous Support (7/12)
EUR/GBP 1HChart 7/18/2012 8:30AM EDT
The EUR/GBP has been consolidating this week between a high near 0.7873 and a low near 0.7830.
It should be noted that this consolidation is developing in the middle of a downtrend. The moving averages are mostly in bearish alignment. A breakout below 0.7825 can easily put them in order with 200SMA on top going down to 8SMA at the bottom closes to price action.
The RSI mostly remained below 60. After tagging 30 consistently, the inability to push above 60 reflects a persistent bearish momentum.
The bearish momentum and price action is more apparent in the 4H chart, where the moving averages have kept bearish alignment and the RSI reading remains low. This is because the market is not only trading in a declining channel, but hugging the lower half of the channel.
EUR/GBP 4H Chart 7/18/2012 9:35PM EDT
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.
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