EURGBP Channel Retracement (July 13, 2017)
EURGBP is trending higher on its short-term time frames but it could have room for retracement to nearby support zones.
Price is moving inside an ascending channel with support at the .8800 major psychological level.
Applying the Fibonacci retracement tool on the latest swing low and high shows that the 50% level is in line with the mid-channel area of interest and the 100 SMA dynamic support while the longer-term 200 SMA is closer to the 61.8% Fib. The 100 SMA is above the 200 SMA so the path of least resistance is to the upside, which means that the uptrend is more likely to continue than to reverse.
The pair already seems to be bouncing off the 50% Fib around .8850 while stochastic is moving out of the oversold area to signal a return in buying pressure. In that case, price could make its way up to the channel resistance or the swing high from here.
UK economic data turned out stronger than expected as the number of claimants rose by only 6K versus the projected 10.3K increase. The unemployment rate improved from 4.5% to 4.6% but the average earnings index fell from 2.1% to 1.8% as expected.
Economic data from the euro zone also turned out better than expected as the region's industrial production rose 1.3% versus the projected 1.0% gain and the previous 0.3% uptick. However, the German WPI fell flat instead of posting the projected 0.2% rebound. German and French final CPI readings are due next.
By Kate Curtis from Trader's Way