After today’s release of the Retail Sales data for July in the UK that came out worse than forecasts, the GBP fell against the USD and the Euro.
The Euro also found a support in the latest FOMC Minutes that suggested a possibility of the delay in the interest rate hike in the US in September, in the confirmation of the approval of the first financial aid tranche to Greece, and after the statement by the French president Francois Hollande of a forecasted 1% GDP growth for this year in France.
Nevertheless, the EUR/GBP pair remains in the downward medium-term trend amid the difference in monetary policies between the ECB and the Bank of England.
Support and resistance
On the daily chart, the price remains near the top border of the descending channel, the breakout of which would allow the pair to grow to 0.7210, 0.7250 (ÅÌÀ144), 0.7340 (ÅÌÀ200).
OsMA and Stochastic on the 4-hour and daily charts give buy signals, but the Stochastic on the 4-hour chart is in the overbought zone.
Should the price overcome the levels of 0.7100 (EMA50 on the daily chart), 0.7080 (EMA200 on the 4-hour chart), 0.7065 (0% Fibonacci, March and May lows), the pair continues falling towards 0.6900.
Support levels: 0.7100, 0.7080, 0.7065, 0.7000.
Resistance levels: 0.7210, 0.7250, 0.7340.
Open short positions from the current levels and from 0.7150, 0.7110 with targets at 0.7080, 0.7065, 0.7010, 0.6990, 0.6950 and stop-loss at 0.7175.
Long positions can be opened after the price consolidation above the level of 0.7210 (with the appropriate indicators signals) with targets at 0.7250, 0.7340, 0.7445.Publication source