EURGBP - Monthly long-term Overview

The Euro-Pound has kept consolidating for the last two weeks after a long and steady ascension on the daily charts. Getting near the upper down-trend line on weekly time frame, it seems like it is making its mind up before a bounce back down and has been trying this week to revisit last highs, attained after a break of the previous week confirmed pinbar and tweezer top. Having just touched the 161.8 Fibonacci extension from last swing high on daily charts, it seems poised for a continuation to the weekly trend line resistance area at 0.8900/8930. If the channel holds, we would see a reversion to the lows or at least to a retest of 0.8500 break (support area 0.8480-0.8530), which is equivalent to a 50% Fibonacci retracement of last daily swing.

The end-of-June weekly pinbar suggests a bottom is forming and I would expect a follow-up of the present consolidation on a wider range. Looking to the upside, 0.8950 would have to be surpassed to then target 0.9150 and 0.9400 as the next resistance steps. However my views for this pair are biased to the downside with 0.8533 as first target, then 0.8360 as the middle line of the daily pitchfork, with a possibility to retest the lows but expecting a hold of the 0.8180/0/8240 as it is a strong area of support.

Daily assessment on Friday October 15, 2010 – at market’s close.

EURGBP	RES2	RES1	SUP 1	SUP 2	R/R	FORECAST	PRICE ACTION
Monthly	0.9807	0.8923	0.7837	0.6156	1:3	Bearish	Doji
Weekly	0.9807	0.8693	0.8250	0.7696	1:3	Bullish	Close above Level 1 Res
Daily	0.8874	0.8808	0.8567	0.8071	1:2.2	Bearish	Confirmed Pinbar