EURGBP’s surge higher on Tuesday took it above key resistance, neutralising thoughts of a top and leaving it trading in a new sideways range, says David Sneddon and his team at Credit Suisse in London.
Following a break of resistance at 0.8824/30, Sneddon says EURGBP may retarget the 0.8951 recent high, where he would expect strong resistance. Sneddon thinks a move above this level would require the trend to turn bullish again, towards the 61.8% retracement of the October to November 2016 fall at 0.8983 (see Chart). Beyond this, he would expect the currency pair to target the late 2016 high at 0.9050.
Below, Sneddon says support can be found at 0.8824/21 initially, then 0.8782. If the week’s low at 0.8743 is removed, this would turn attention back towards 0.8719/03 – the mid-June low, the 38.2% retracement of the April to July 2017 rise, and the rising 55-day average – where he expects solid support to appear.