Strategy 02 October 2013

Maintain a negative bias to EUR/GBP

Targets the 0.7750 2012 low longer term

EUR/GBP remains under pressure following its recent break below the 2012-2013 up trend. The market last month failed at failed at the top of a 4 year down channel, which is currently located at .8738 and given the erosion of the 55 and 200 week moving averages the short, medium and longer term outlooks continue to look negative.

Our initial target is the 50% retracement of the move up from the 2012 low, this is located at .8285 and is expected to act as the break down point to 0.8160 (the 61.8% of the same move) and eventually head back to the 2012 low at 0.7757 and potentially to the base of the channel, currently at 0.7579. The 2012 low of approximately 0.7750 is achievable by the end of 2014.
Short term rallies will find fairly good resistance at 0.8570/0.8512 (June low and the 2 month downtrend) and should remain contained by the 0.8652 end of August peak for the negative bias to remain entrenched.
To know more click here PDF