The EUR/GBP slips lower today and tries to retest a broken dynamic resistance. The perspective remains bullish, so the minor retreat could bring us only a chance to go long again on this pair. Should climb much higher in the upcoming period because is located in the buyer’s territory. A minor decrease was somehow expected after the impressive rally.
Price will retest some important support levels (resistance turned into support) these days and will confirm them before will resume the upside movement.
The Cable increased a little also versus the greenback, but continues to drop versus the Japanese Yen, even if the United Kingdom Retail Sales have increased by 0.3% in July, beating the 0.2% estimate. The indicator remains steady at 0.3% growth and lifted the Cable.
EUR/GBP is trading in the red despite the good Euro-zone data, the Final CPI increased by 1.3% in the last month, matching expectations and the 1.3% growth in the former reading period. Moreover, the Final Core CPI rose by 1.2%, matching the 1.2% estimate and the 1.2% growth in the previous reading period, while the Trade Balance jumped from 19.0B to 22.3B.
Price retests the broken warning line (wl3) of the former descending pitchfork, could decrease along with it till will retest the 50% Fibonacci line (ascending dotted line) again. The next upside targets are at the upper median line (UML) of the major ascending pitchfork and at the 0.9226 major static resistance.
Could move in range in the upcoming months if will stay below the 0.9226 swing high, you can see that we may have an extended sideways movement. However, a breakdown below the 0.9048 static support and below the third warning line will open the door for a large decrease, will decrease at least till the median line (ML).
A further increase on the medium and long term will be confirmed after a valid breakout above the 0.9226 and above the upper median line (UML) of the major ascending pitchfork. I want to remind you that a failure to reach the mentioned resistance levels will send the rate tumbling.