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Technical Checks: Important GBP Pairs


Being nearly 24-hours away from the crucial EU referendum, most GBP pairs now seems trading on cautions tone, the EURGBP, not being exception, struggles around six month old upward slanting trend-line support area of 0.7650-45. Considering the February's deal with EU, the UK will be more beneficial during its post-referendum days, given the Bremain supporter wins, which in-turn would help the GBP to extend its recent up-move. Given the pair drops below 0.7645, the 20-day SMA level of 0.7565 becomes its next stop before visiting the 50% Fibonacci Retracement level of its July 2015 – April 2016 upside, near 0.7525. Should the pair continue on its decline following 0.7525 break, the 0.7450 and the 61.8% Fibo level of 0.7385 are likely following supports that could be seen on chart. On the upside, 0.7740-50 can continue restricting the pair's immediate rise, clearing which 100-day SMA level of 0.7830, adjacent to 23.6% Fibo around 0.7840 may entertain the pair bulls before it could aim for 0.7930-35 horizontal area. If the Brexit takes place and the pair surpasses 0.7935, chances of its rally beyond April highs of 0.8110 can't be denied.


Following its reversal from short-term descending trend-line support, the GBPJPY presently aims to counter the 154.50 and the 155.70 nearby resistance ahead of aiming the 50-day SMA test which is at 156.40 now. If the pair successfully surpasses 156.40, the 100-day SMA level of 158.60 and the 160.00 psychological magnet are important upside numbers to observe, surpassing which 162.50 and the 163.90 – 164.00 horizontal area can come into play. Alternatively, 152.30 can provide immediate support to the pair, breaking which 150.50 and the 61.8% FE of its February – April downside, near 149.20, might hinder the Brea's entry. Given the pair drops below 149.20, mentioned trend-line support of 147.50 can pose as an intermediate halt during the pair's plunge to 145.40 and then to the 143.00 round figure mark.


Even if the 100-day SMA stopped the GBPCAD's north-run on Tuesday, the pair refrained from breaking the 23.6% Fibonacci Retracement of its December 2015 – June 2016 decline, and is presently indicating a bounce towards challenging the 1.8825 SMA level again. Should the pair overcomes the mentioned SMA mark, it could rise to 1.8980 and then to the four-month old descending trend-line resistance of 1.9050. Moreover, pair's additional advances beyond 1.9050 can fuel it to surpass the 38.2% Fibo level of 1.9140 and to head towards 1.9250. Meanwhile, pair's decline below 23.6% Fibo level of 1.8715 can drag it to 1.8600 and then to 1.8500 – 1.8490 support-zone. Given the pair's extended downside below 1.8490, 1.8280 can act as a mediator to pass before witnessing the 1.8000 mark on the chart.


While 61.8% FE of November 2015 – April 2016 downside of the GBPNZD triggered the pair's bounce, the pair failed to clear the 2.0700 mark and is signaling a re-test of April lows, around 2.0360. During its further decline below 2.0360, the pair can witness 2.0260 and the 2.0000 prior to printing a new low below 1.9960. However, expected strength of the GBP can reverse the pair towards breaking 2.0700 mark during post-referendum trading, provided the Bremain wins, giving room for its further rally to 2.0900 and then to 2.1080 – 2.1100 area, comprising 100-day SMA level. Further, pair's successful break above 2.1100 enables it to aim for 23.6% Fibonacci Retracement of its August 2015 – April 2016 decline, near 2.1500, ahead of conquering with nine-month old trend-line resistance of 2.1680.

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Thursday, 23 Jun, 2016 / 4:00

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