I’ve got this simple break-and-retest setup on the short-term chart of EURGBP.
Will the downtrend still resume?
Before moving on, ICYMI, today’s Asia-London session watchlist looked at a bullish divergence and pullback on EUR/AUD ahead of Australia’s quarterly CPI. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
U.S. Senate unveils corporate tax legislation plans
Australia posts another 0.8% increase in CPI for Q3
Australia’s trimmed mean CPI up from 0.5% to 0.7% in Q3
New Zealand final ANZ business confidence index at -13.4 in Oct
New Zealand trade deficit widened from 2.139B NZD to 2.171B NZD
British finance minister Sunak announced U.K. growth upgrade
U.K. annual budget estimated return to pre-pandemic spending levels
German GfK consumer climate index up from 0.4 to 0.9 vs. -0.4 estimate
German import prices up 1.3% vs. projected 1.5% gain
Upcoming Potential Catalysts on the Forex Economic Calendar:
U.S. headline and core durable goods orders at 12:30 pm GMT
BOC monetary policy statement at 2:00 pm GMT
U.S. EIA crude oil inventories at 2:30 pm GMT
BOC press conference at 3:00 pm GMT
If you’re not familiar with the forex market’s main trading sessions, check out our Forex Market Hours tool.
What to Watch: EUR/GBP
This pair has been trending lower for quite some time, and it looks like another bearish correction opportunity is poppin’ up!
Price found support at the .8400 handle and is pulling up to the former support at .8430, which happens to line up with the 38.2% Fibonacci retracement level.If this is enough to keep gains in check, EUR/GBP could slump back to the lows or make new ones!
Stochastic is already indicating overbought conditions or exhaustion among buyers, so sellers could take advantage and regain the upper hand.
The 100 SMA is below the 200 SMA as well, confirming that resistance levels are likely to hold.
If you’re hoping to catch a more conservative entry, a larger correction might still reach the 61.8% Fib that lines up with a falling trend line and is near the .8450 minor psychological mark.