EUR/GBP starts to correct higher towards the recent high at 0.8732 – Commerzbank

EUR/GBP is looking for a correction higher. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the pair to close again above the 20-day moving average at 0.8605 to confirm the move. 

Key quotes

“EUR/GBP has registered a triple divergence of the daily RSI, and we continue to suspect a correction higher is likely.” 

“A close above the 20-day ma at 0.8605 has been seen, and we would like to see another one to confirm. The intraday Elliott wave counts are more positive, and we favour a correction higher.” 

“Rallies would need to clear the recent high at 0.8732 to negate current downside pressure. Only above here would allow for scope for recovery to 0.8864/61 (lows seen in June, September and November), but that is expected to hold the topside.”