EURGBP TECHS: Southbound
- RES 4: 0.8448 High Oct 31 and reversal trigger
- RES 3: 08376 High Nov 19 and a bull trigger
- RES 2: 0.8337 50-day EMA
- RES 1: 0.8306 20-day EMA
- PRICE: 0.8229 @ 15:42 GMT Dec 11
- SUP 1: 0.8225 Low Dec 11
- SUP 2: 0.8203 Low Mar 7 2022 and a major support
- SUP 3: 0.8200 Round number support
- SUP 4: 0.8188 1.00 proj of the Oct 31 - Nov 11 - 19 price swing
A fourth consecutive session of lower lows and lower highs for EUR/GBP to pile pressure on support, with 0.8203 the level to watch - the Mar 7 ‘22 low and the lowest point of a multi-year range. A break through support here would work against the RSI and could tip the price into technically oversold territory for the first time since September. This week's break lower has cancelled a recent bullish signal - an engulfing candle on Nov 12 - as rate differentials and aggressive ECB pricing dictate play.
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EURGBP TECHS: Breaches Key Support
- RES 4: 0.8523 High Aug 22
- RES 3: 0.8499 61.8% retracement of the Aug 8 / Oct 18 bear leg
- RES 2: 0.8464 High Sep 11 and a key resistance
- RES 1: 0.8377/0.8448 50-day EMA / High Oct 31 and reversal trigger
- PRICE: 0.8274 @ 16:04 GMT Nov 11
- SUP 1: 0.8260 Low Nov 11
- SUP 2: 0.8250 Low Apr 14 ‘22
- SUP 3: 0.8203 Low Mar 7 2022 and a major support
- SUP 4: 0.8200 Round number support
EURGBP maintains a softer tone and the cross traded to a fresh cycle low Monday. Price has breached a key short-term support at 0.8295, the Oct 18 low. The move down confirms a resumption of the current downtrend. Moving average studies remain in a bear-mode position, highlighting a dominant downtrend. Sights are on 0.8250, the Apr 14 2022 low. Key short-term resistance and a reversal trigger is at 0.8448, the Oct 31 high.
POLITICAL RISK: Scott Slightly Favoured In Race For Senate Leadership
Senator Rick Scott (R-FL) is slightly favoured to win the race to replace outgoing Senate Minority leader Senator Mitch McConnell (R-KY) as the top Republican in Senate, according to Polymarket.
- President-elect Donald Trump has so far declined to endorse a candidate, despite a wave of Trump-aligned media figures calling on Senator to back Scott in Wednesday's secret ballot. A strong relationship with the Senate Majority Leader will be critical to legislating Trump's agenda, but the Washington Post notes: "Some advisers and people who have spoken to him have suggested to Trump that he not get involved, questioning if it’s the place to extend political capital, especially if his choice doesn’t win."
- The Post notes, "Thune’s most important supporter right now might be Sen. Steve Daines (R-MT), who is extremely close with Trump and is in Republicans’ good graces for winning back the majority as NRSC chair, a position that has also made him close with the incoming Republican class. Daines has been doing work behind the scenes to help Thune’s candidacy."
Figure 1: Next Senate Majority Leader, % Implied Probability
Source: Polymarket
GBPUSD TECHS: Trend Signals Remains Bearish
- RES 4: 1.3389 High Oct 1
- RES 3: 1.3274 High Oct 3 and the bull trigger
- RES 2: 1.3175 High Oct 4
- RES 1: 1.2991/3048 20-day EMA / High Nov 6
- PRICE: 1.2867 @ 16:03 GMT Nov 11
- SUP 1: 1.2834 Low Nov 06 and the bear trigger
- SUP 2: 1.2799 Low Aug 15
- SUP 3: 1.2762 Low Aug 13
- SUP 4: 1.2665 Low Aug 8 and key support
The trend condition in GBPUSD remains bearish and last week’s fresh cycle low reinforces current conditions. The move down highlighted the end of the recent corrective bounce and confirms a resumption of the downtrend. Key short-term support and the bear trigger at 1.2844, the Oct 31 low, has been pierced. A clear break of it would open 1.2799, the Aug 15 low. Key short-term resistance has been defined at 1.3048, the Nov 6 high.
