4 Dec 2014



Overnight rate hit the previous range breakout target at 188.18 and has formed a resistance level there. A break above this level should take the rate up to test the major psychological level at 190.00

A failure to break the highs should result in some kind of pullback, although it should be capped by old resistance - now support around 187.00 and 186.10


Strong sterling all over the board also made EUR/GBP to break the last week's range support and fall further down to 0.7832. Although there is some more room to fall till the triangle support I would advise to limit your risk exposure before today's BOE and ECB rate decisions.

A dovish ECB (an update of the soveraign bond purchases) should push the rate lower and break out of the triangle formation although at least a 4H close under 0.7800 is advised to short the pair.


The rate tested the falling trendline resistance and failed once more even on better than expected Retail sales data (0.4% vs 0.1% exp.), so the range is still intact. To gauge the trading direction it first need to break the falling trendline resistance over 1.0850 to the upside or this year's rising trendline below 1.0760.

Next resistance level for an upside break should be the old support/new resistance at 1.0930, however, adownside break should take the rate down to test the lows around 1.0500.


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