Friday, June 26, 2020

Bearish Divergence On EURGBP

Marco Tosoni

FХ Strategist & Financial Commentator

After the powerful rally built in the first quarter of the year, with the quotes to reach a new historical top around 0.95 area, this pair has started a bearish movement that brought the prices back towards 0.87 area nearby the previous tops set in the end of February and followed by a bullish base, that has anticipated the last bullish swing towards 0.9100 area.

During the past 6 weeks anyway, this pair is consolidating around the resistance area with a progressive volatility compression and a slight rising movement until the top set on Tuesday, around 0.9080.

Taking a look at the RSI indicator we detect a short-term bearish divergence, that could favour a technical correction, also considering how the pound has lost relative strength throughout the last quarter.

The bearish setup would be activated in case of breakdown of yesterday’s bottom around 0.8990 area, with a stop loss to place at 0.9090 over the weekly tops. The target price on the other hand could be expected around 0.8990 nearby the support area set during this month.

As always I recommend to trade carefully and to plan at best every move. Don’t forget to subscribe to NBHM YouTube Channel to stay up to date with the financial markets! Have a good trading and see you for the next video.

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