On Wednesday, the Euro significantly fell against the Pound.
The GBP was supported by strong labour market data from the UK. The Unemployment Rate for 3 months at the end of August unexpectedly fell by 0.1% to 5.4%, while Average Earnings grew from 2.9% to 3.0%.
At the same time, the Euro was pressured by poor Industrial Production data from the eurozone that in August shrank by 0.5%.
Support and resistance
Bollinger Bands on the daily chart is turning horizontally while the price range is slightly widening. MACD is falling but have not formed a sell signal yet. Stochastic is moving down away from the overbought zone.
The indicators recommend considering short positions.
Support levels: 0.7392 (13 October low), 0.7359, 0.7332 (7 October low), 0.7302. 0.7275, 0.7223, 0.7196 (22 September low).
Resistance levels: 0.7442 (local high), 0.7492 (13 October high), 0.7535 (end of February high), 0.7600.
Long positions can be opened after the breakout of the level of 0.7430 (with the appropriate indicators signals) with the target at 0.7492 and stop-loss at 0.7410. Validity – 1-2 days.
Short positions can be opened after the breakdown of the level of 0.7380 with targets at 0.7345, 0.7310 and stop-loss at 0.7400. Validity – 2-3 days.