The $EURGBP completed its Fibonacci move from the highs at 0.7482 with the new low below 0.7128. While it didn’t appear to be the top at the time, the euro became mired in Greek financial drama last week. The smoke-and-mirrors of Greek repayment is once again wearing thin on the markets. The euro had been rallying higher as Greece communicated ability to repay its debts. Then last week, the European Central Bank (ECB) meeting minutes confirmed the ECB’s satisfaction with its quantitative easing (QE) program and its intended effect on financial markets. The euro collapsed as markets were reminded that QE continues in full form out of the ECB.
While the $EURGBP may have completed a Fibonacci move on the daily chart, the Fibonacci move on the weekly chart still has yet to be completed. The 0.7100 support level is a formidable support level. It became the level against which bids stepped into the market to ignite the latest rally to 0.7482. While price last week did break below the 0.7100 support level, the trading week closed above it. With price already below the support level to start the new trading week, there are a slew of former lows to contend with as the $EURGBP looks to complete price action to the major support level at 0.7000.
This is an excerpt from this week’s issue of Quid Report. Subscribers receive my research on all major GBP pairs at the beginning of the week, including access to @faithmightfx on Twitter for daily, real-time updates to the weekly report. AVAILABLE NOW.