Broke reverse head and shoulder neckline
The EURGBP is higher in trading today - leading/following the GBP weakness in trading today. The GBP is the weakest of the major currencies in trading today so far (click here).
Technically today, the price action has been pushed by some bullish developments.
- The price tested but then moved above the 200 hour MA at the 0.8471 level currently (green line).
- The price also broke above a reverse head and shoulder neckline around the same level of the 200 hour MA.
The price move higher has moved to test a topside trend line connecting the highs from Nove 15 and November 30th. Also near the line, is the 100 bar MA on the 4-hour chart at 0.8513.
As I type we are seeing another move above those resistance levels and a test of the day highs. The current price is trading at 0.8523. Traders will now watch the 100 bar MA on the 4-hour chart as support. We have traded above the MA line on a number of occasions today. Either this most recent break will lead to another leg higher or it will fail. That line seems like a logical level to define risk for longs now.
On a continuation move higher, the 0.8565 (prior swing levels) and 0.8588 (38.2%) become the next upside targets for the pair (see yellow area on the hourly chart above).
PS/ IF.....the reverse head and shoulders becomes an example for the text books, the measured objective would take the price up toward the 100 day MA at the 0.8634 level (see hourly chart above). Looking back to mid November, that MA was a level that traders leaned against....
