Technical analysis - next week's EU referendum is continuing to drive the price action in forex and indices. This week we're looking at EURGBP and the FTSE again.

EURGBP

Since the last post EUR/GBP made another assault of the 0.7995 where it was faced with considerable resistance. The selling pressure then continued to break the current rising trend which may suggest further Euro weakness. 

However one should be cautious as price approaches a confluence of potential support from 0.7852/0.7831. These levels coincide with many Fibonacci levels with the lowest level of potential support being the 38.2% retracement of the move upwards from latter Mays lows.

Moreover, other than the cluster of Fibonacci retracement levels the support zone corresponds with the breakout of the bullish flag formation. However if price does find support in and around these levels upside momentum could be capped by the recent swings highs  of  0.7995 on the other hand should this support zone break further support would be found at 0.7781.

EURGBP_Jun17

EURGBP_Jun17_2


FTSE

The FTSE has seen rather interesting price activity over the last couple of days. After making a low of 5895 price attempted a rebound which initially failed seeing the FTSE retest this low on yesterday’s trade where it found significant support bring the FTSE close to testing the downward breakout zone of  6055/6072.

However as I write this post it appears the breakout zone may be acting as the short term resistance as the current candle suggests selling pressure with its long upper shadow. Interestingly the 38.2% retracement of the recent fall coincides with the breakout zone of the range. Should these levels hold firm and downward price pressures continue in the following  days before the referendum, we could see a test of the recent pivotal lows of 5895. However recent momentum may indicate an upward price move on the other hand key resistance remains at 6060.  

FTSE_Jun17_1

FTSE_Jun17_2

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