The Brent Crude has retested its rising support trend line as resistance last week and on its first attempt lower since then, it found support at the 7108.44 level. Price action has weakened since the double top created in May at 8049.20 and a secondary lower double top was created in late June and early July around 7960.00. Resistance for the pair is coming in at 7380.90 followed by the trend line at 7550.00. A break higher would see a test of 7627.65 which if broken could see a quick move higher to 7900.00.
The selloff has been the result of a number of factors, including OPEC production levels and the exceptionally warm summer. With the uptrend broken traders are looking for support to hold at yesterday’s low ahead of 7100.00. The 7000.00 level comes in as a psychological area with a drop under this point potentially leading to a quick move down to 6800.00 followed by support from the higher low at 6656.00. A move under this area could see price trickle down to 6167.68 and the 6100.00 support zone from late 2017.
The EURGBP market has managed a convincing break higher over the last two months. After a drop to 0.8650 it has rallied above 0.9000. The price seems to be caught in a to and fro cycle on brexit headline and economic data. The bad weather affected both currencies early in the year but the Euro has gained strength of late with only the Turkish crisis in recent days damaging its glint. Resistance for the pair is nominally located around 0.9000 with a confirmed break from this level potentially setting the direction going forward. Last week’s high at 0.9035 would give traders a level to engage with and a breech could lead to the 0.9110 area.
Support for the pair comes in at 0.8900 with the rising trend line coming to that level in about 48 hours from now. The 0.8952 level was retested as resistance yesterday and while this resistance holds short sellers have a good chance of breaking under the trend line and reversing part of the rally. The 0.88175 level is key to this chart as long positions will be opened ahead of it but a slip under 0.8800 can see a move down to 0.8700.