EUR/GBP: The risk turns lower with support seen at 0.8982 – Credit Suisse

EUR/GBP has seen an aggressive rejection of its downtrend from mid-September at 0.9123 for the completion of a larger bearish “outside day” and analysts at Credit Suisse look for this to finally clear the way for a more sustained decline to 0.8982.

Key quotes

“The choppy tone remains as EUR/GBP quickly reverses Tuesday’s strength after rejecting its downtrend from mid-September, now at 0.9123 for the completion of a larger bearish ‘outside day’ and a close below the 55-day average.” 

“We look for the pair to finally clear the way for a more sustained decline to 0.8982 next, the 50% retracement of the uptrend from late April, ahead of 0.8956 and then more important support from the trend channel low at 0.8930/29, where we would expect fresh buyers to show.” 

“Bigger picture, below 0.8874/64 remains needed to mark a more important top.”

“Resistance is seen at 0.9049 initially, with 0.9074/78 now ideally capping to keep the immediate risk lower. Above can see strength back to retest 0.9123/31.”