EURGBP: Bears Need Penetration of Daily Cloud to Resume

Technical analysis of Forex market

The cross extends a steep fall into third consecutive day and cracks significant support at 0.8501 (top of thick ascending daily Ichimoku cloud).

Bears accelerated on Wednesday after a bullish signal was generated on break of trendline support at 0.8584 (bull-trendline off 0.8281, Apr 14 low) and boosted by formation of daily Tenkan-sen / Kijun-sen bear-cross and daily close below pivotal Fibo support at 0.8540 (38.2% of 0.8249/0.8720 rally).

Rising negative momentum and MA’s (10/20/30) in bearish setup support the action, while cloud provides headwinds, which are boosted by oversold stochastic.

Bears need firm penetration into cloud and violation of next Fibo level at 0.8485 (50% retracement) for confirmation that would open way for extension towards next strong supports at 0.8445/42 (converged 100/200 DMA’s) and 0.8434/29 (daily cloud base / Fibo 61.8% of 0.8249/0.8720).

Res: 0.8540; 0.8567; 0.8595; 0.8602
Sup: 0.8445; 0.8429; 0.8392; 0.8360

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