By: Doug Rosen
So far this week and on the weekly time frame the EUR/GBP made a 50.0 swing fib to the downside that was overlapped with the weekly 13 ema and of course price was pushed downward as expected. The price level the weekly 13 ema was at was the same price level where the daily 55 ema had been in and I am sure this added confluence helped to push this pair downward.
On the daily time frame, as this pair heads down it will reach another fib level to the upside and the 38.2 fib level is overlapped with the 21 ema and the 5 ema is heading up to meet price as well. We are approaching this level at this time, it is around .8610 and I will expect to see some bullish reaction in that vicinity.
Moving on to the 4 hour time frame the same 38.2 fib level I just remarked about will also be met with the 21 and 144 ema which I expect will further add to bullish pressure at that level.
On the hourly time frame I see what may appear to be a complex top forming which may appear as a head and shoulders pattern on the 15 minute time frame. This means that price could still drop further.
At this time price is at a dynamic support level , the hourly 55 ema which can help send price up to the 12 ema and make a fib to the downside that will send price falling downward.
At the time I am writing this analysis, the next level of support is yesterday's low at .8616 overlapped with the 233 ema and the next area below that will be the .8602 level which was last week's high. So, keep an eye on a bounce up, possible to .8657 area and then a possible drop down from there if price makes a double top at .8657 which happens to be the monthly central pivot as well as the 50.0 fib to the downside.