Chart of the Day – EUR/GBP
Is sterling on the brink of another key move against the euro? After a corrective move in early July, Euro/Sterling has now effectively posted three doji candles in the past four sessions and this reflects the uncertainty with the recent trend. Weak sterling pulls EUR/GBP higher and the market is increasingly testing the overhead resistance as the correction of the past three weeks has run out of steam. The resistance around £0.8425 capped the gains last week and again capped an initial test yesterday. However, the momentum indicators are suggesting that there could be about to be another resumption of the upside. The Stochastics have crossed higher, whilst the RSI has stopped its retreat in the mid-50s. A corrective downtrend was broken yesterday and there is a sense that an upside break is close. Look for not only an intraday push above £0.8425 but also a closing breach to really confirm the bulls are regaining control. If this is seen then it would open initial resistance at £0.8470 but then the recent highs at £0.8625. There is support now at £0.8300 which is protecting £0.8247.