Currency pair EUR /GBP at the end of the second quarter was replaced by anger at the mercy of interrupting a three-month downward movement. Many wondered how stable the new upward movement and what are its prospects in the medium term.

From a technical point of view on the graph the pair attract the attention of 4 resistant line - actually the trend line (labeled brown), as well as two lines, which (as shown price history) course is very inclined to return (indicated by green and orange). We should also mention the purple line, which for years served as a resistance, and then another for almost a year - support.

Given the fact that the target levels specified by us three lines (orange, green and brown) for the next month, is remarkably consistent with the levels offered by the Fibonacci fan, then from a position of technical analysis it makes sense for them to navigate. Ie pessimistic scenario, with support for the corrective course will provide the level of 0,86, and in case of penetration rate is likely to be a long time to consolidate along the purple line support from a mark 0,85.

In an optimistic scenario, which we are more inclined, the immediate aim of growth can provide the level of 0,89, and in the case of penetration of the median line, Fibonacci fan, this top level has a chance to become the new support. In favor of the optimistic scenario says formed on the chart figure flag, which, in general, signals of an impending continuation of the trend (here - increase).

 

Source - Reuters

Technical indicators generally do not contradict these expectations: the fast moving average lies above the slow and fast Stochastic crossing the slow upward, RSI is moving in the upper half of the canal system of directional indicators /-DM disagree (indicating the strengthening of a trend and an apparent withdrawal from the model flag indicating a pause in a dynamic trends), the ADX has risen above both lines DM (this also shows a favorable time for shopping).

 

 

Source - Reuters

 

Thus, our technical expectations for a pair of EUR /GBP are buoyant nature - is to monitor the conduct of the course near the 0.89 mark and in case of penetration up can be expected to strengthen towards 0.92 within October.

 

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