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    EUR/GBP: still grinding lower despite slow momentum

    The pair has fallen to just under formidable support from a major channel line, and the 200-month MA in the 0.72s, on longer time-frames.

    It’s unclear whether these support lines have been definitively breached or not yet. If not then they could eventually provide the basis for a reversal and a multi-month rally back up within the channel.

    A break below the 0.7013 lows and the S2 monthly pivot at 0.7006, however, including a 20-point margin – so below 0.6986, would be a very bearish sign, indicating a possible break out of the channel and targeting support from the round-number at 0.6900 initially.

    On the 4-hr chart momentum has really slowed down, however, as the pair has ground lower over the last few days and this has set up a bullish convergence which could result in a short-term pop higher.

    Ideally I would want to see a break above the down-sloping trend-line and S1 pivot at around 0.7135 for confirmation of a short-term reversal, with initial target at 0.7160.

    A great deal depends on U.K GDP, out on Thursday May 28, with a lower result signalling a recovery and a higher result a continuation down.
    EURGBP26b

    The pair has fallen to just under formidable support from a major channel line, and the 200-month MA in the 0.72s, on longer time-frames.

    It’s unclear whether these support lines have been definitively breached or not yet. If not then they could eventually provide the basis for a reversal and a multi-month rally back up within the channel.

    A break below the 0.7013 lows and the S2 monthly pivot at 0.7006, however, including a 20-point margin – so below 0.6986, would be a very bearish sign, indicating a possible break out of the channel and targeting support from the round-number at 0.6900 initially.

    On the 4-hr chart momentum has really slowed down, however, as the pair has ground lower over the last few days and this has set up a bullish convergence which could result in a short-term pop higher.

    Ideally I would want to see a break above the down-sloping trend-line and S1 pivot at around 0.7135 for confirmation of a short-term reversal, with initial target at 0.7160.

    A great deal depends on U.K GDP, out on Thursday May 28, with a lower result signalling a recovery and a higher result a continuation down.
    EURGBP26b


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