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EUR/GBP has seen a sharp rejection of the 21 and 55-day averages and below 0.8971 should see a test of the July low at 0.8937, removal of which would mark a top, according to the Credit Suisse analyst team. The pair is currently trading near the initial resistance at 0.8997, though.

Key quotes

“A break of the low of the past week at 0.8985 /71 is seen likely to expose the 0.8937 July low. Below here would see a bearish ‘double top’ complete to mark a more important swing lower with support then seen next at 0.8909, then more importantly at 0.8866/64 – the ‘neckline’ to the April/May base, June lows and 61.8% retracement of the April/June rally. Whilst we would look for this to hold at first, a break in due course can see support at 0.8779 next.” 

“Resistance is seen at 0.8997 initially, with the immediate risk seen lower whilst below 0.9024/30. Above can see a move back to 0.9048, then 0.9060/65, but only above this latter area would see the risk turn back higher in the range.”