The EURGBP pair has leaned on its rising support trend line, which formed in May and June, at the 0.8859 low from Monday this week. The 100 DMA at 0.8900 is being tested at present. A move higher would need to break above the 0.8915 area and today’s high. From there potential resistance exists at the 50 DMA around 0.8950, which is itself an area of interest ahead of 0.9000. The lower high at 0.8996 is part of this area of resistance also. Above these levels there is a lower high in the area of 0.9050 with the late August high around 0.9100 which will be of interest to traders if price reaches that level again.
Support at the trend line will be crucial going forward. A loss of this support, at 0.8866 today, may test the area of support immediately underneath. This area encompasses the low from Monday, previously mentioned, the 0.8850 level and the 200 DMA at 0.8843. If price falls under this area the 0.8800 level may provide support followed by potential support further down at 0.8714 and 0.8700. The low from April around 0.8621 might provide traders with an opportunity to engage with the market with the 0.8600 area close by to limit risk against.
The weekly CADJPY chart is showing how price action is attempting to move higher after breaking above its 200 Week moving average last week at 88.000. This level is now key for the pair. There is a chance that price action is forming a head and shoulders pattern with the 80.568 level the point to watch for a break down. Mean while a move above 89.451 might see a test of 90.000 develop. Beyond this area there is potential resistance at 91.672 as the highs from 2017. A push past this area might result in an advance to 94.000.
A loss of 88.000 may put pressure on the 86.771 area as support. Below this level there is the 86.000 which is currently hosting the 50 WMA, with the 100 WMA at 85.627. These indicators may add strength to the 86.000 and form an elastic zone under it. If price break down under this zone the recent lows, under 84.000, might be where traders shift their focus to next, such as the 83.780 area. Below this level the June low around 82.225 may form support in addition to the 82.000 level. The low for 2018 can be seen around 80.570 when it was formed in March.