Forex technical analysis: EURGBP falls to support area and rises to resistance area

Finds good support earlier in the day on daily and hourly. Helped higher on UK Brexit news

The UK Brexit news send the GBPUSD tumbling lower and it has also helped to push the EURGBP back higher to new day highs. The pair did find support earlier in the day at support on the hourly and daily charts.

Looking at the hourly chart above, the pair earlier in the day, based against the 61.8% of the move up from the Sept 27 low at 0.88543 (low reached 0.8855). The market had a modest bounce at first, but on the headline on Brexit (see Adam's post here) it was pushed higher. The price moved back up to test last Monday's low at 0.89058 (high reached 0.89066). The pair trades above and below the 0.8900, now. The 50% midpoint of the move same move higher comes in at 0.8888 (see chart above) and that level will be a close support today. Stay above is more bullish. If the 0.8906 area can be broken, the 200 and 100 hour MAs at 0.8930-315 are a key resistance area that should attract some selling on the first look (green and blue lines in the chart above).

Taking a broader view of the daily chart, the low today entered an area that has been a swing level going back in time. The 0.88509 to 0.8879 area has been a floor/ceiling (see yellow area and red numbered circles). So in addition to being the 61.8% on the hourly chart, the low stalled in a swing area on the daily chart. That area will remain as a bullish above and bearish below dividing line going forward.

So buyers found decent support on the hourly and daily, and have pushed higher, but have stalled at resistance (red numbered circles on the hourly). Look for support at 0.8888. If it holds on a correction, there should be another push higher. A break below and the waters are more muddy as the buyers and sellers equalize each other.

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