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EUR/GBP - German news accentuates the impact of 'shooting star'

  • Euro offered as German coalition talks collapsed.
  • German news accentuates the impact of topping pattern - 'shooting star'.
  • Still, the cross defends confluence of key trendline and 50-day MA.

EUR/GBP dropped to a 5-day low of 0.8879 in Asia as the common currency took a beating on German political uncertainty.

Moreover, the German news has only accentuated the bearish effect of the 'shooting star' candlestick reversal pattern confirmed on Nov. 15/16.

Still, the pair has managed to defend the support offered by the trendline sloping upwards from the Nov. 1 low and Nov. 11 low. However, it could be breached later if the European equities react negatively to increased prospects of minority government in Germany or re-elections. Meanwhile, the British Pound remains at the mercy of the Brexit-related newsflow.  

As of writing, the currency pair is trading just below 0.89 levels; still down 0.27 percent on the day.

EUR/GBP Technical Levels

An end of the day close below 0.8878 (50-day MA + trendline support) would add credence to the topping pattern (shooting star) and shall open doors for a deeper sell-off to 0.8812 (Nov. 11 low) and 0.8778 (200-day MA). On the higher side, a beach of the hurdle at 0.8923 (session high) could yield rally to 0.8951 (50-day MA) and 0.8975 (Nov. 11 high).

 

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