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EUR/GBP double top on hourly charts?

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 15, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - The EUR/GBP jumped to 0.7606 on the back of risk aversion (previous day’s high was 0.7607) before falling back below 0.76 handle.

    Double top on hourly chart

    The pair fell to 0.7525 levels from the one-year high of 0.7607 yesterday, but made another test of 0.7606 levels on account of the risk aversion in the markets. The drop in the oil prices and risk aversion in Asia pushed the European equities lower, triggering a wave of carry unwind.

    Consequently, the EUR strengthened while the GBP/USD dropped. However, the EUR/GBP once again turned lower from the high of 0.7606, due to which the hourly chart shows a double top formation with a neckline support at 0.7525.

    It remains to be seen if the markets stabilize and send the cross lower to 0.7525 or the US equities drop and help the EUR/GBP pair take out 0.7607 levels.

    EUR/GBP Technical Levels

    At 0.7590, the immediate resistance is seen at 0.7607 (yesterday’s high), above which the cross could needs to take out 0.7611 (weekly 100-MA) in order to extend gains to 0.7745 (Dec 2014 low). On the other hand, a break below 0.7525 (double top neckline) would expose 0.7500 handle under which the cross could extend losses to 0.7416 (Dec 2015 high).
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