FOREX: Sluggish Sterling Recovery Sees EURGBP Test Monday's High

• In the equity space, S&P E-Minis are holding on to the bulk of their latest gains following the recovery from the Nov 21 low. The climb has resulted in a breach of the 20- and 50- day EMAs. This highlights a bullish development and the likely end of the corrective cycle between Oct 30 and Nov 21. A continuation higher would signal scope for a move towards the key resistance and bull trigger at 6953.75, the Oct 30 high. Key support lies at 6525.00, the Nov 21 low. First support is at 6674.50, the Nov 25 low. The move higher in EUROSTOXX 50 futures last week undermines a recent bearish theme and the contract is holding on to most of its gains. Price has traded above the 20- and 50-day EMAs, signalling scope for a stronger recovery near-term. A continuation would open 5691.30 and 5742.40, the 61.8% and 76.4% retracement points of the Nov 13 - 21 bear leg. For bears, a reversal lower would instead expose the key S/T support and bear trigger at 5475.00, the Nov 21 low. Initial support lies at 5602.97, the 50-day EMA.

• RES 4: 1.1728 High Oct 17
• RES 3: 1.1694 50.0% retracement of the Sep 17 - Nov 5 bear leg  
• RES 2: 1.1656 High Nov 13 and key resistance
• RES 1: 1.1628 Intraday high 
• PRICE: 1.1623 @ 10:43 GMT Dec 1
• SUP 1: 1.1491/1469 Low Nov 21 / 5 and the bear trigger 
• SUP 2: 1.1425 1.500 proj of the Oct 17 - 22 - 28 price swing
• SUP 3: 1.1392 Low Aug 1 and bear trigger 
• SUP 4: 1.1313 Low May 30

The trend structure in EURUSD remains bearish and recent gains appear corrective. Note that the pair has breached both the 20- and 50-day EMAs, however, key short-term resistance to monitor is 1.1656, the Nov 13 high and a bull trigger. Clearance of this level would highlight a reversal. Today’s gains cancel a doji reversal signal from last Thursday.  For bears, a resumption of weakness would open key support at 1.1469, the Nov 5 low.