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EUR and GBP Approach Major Support Area

Forex
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Thursday, April 20, 2017/ 4:30 PM /Meristem



Source:
www.merifx.com 

Fundamental Indication 
GBP: The British Pound (GBP) made sharp gains on Tuesday after Prime Minister, Theresa May suddenly announced a snap election to be held on June 8. Speaking in Downing Street, May said her government has delivered its mandate after the Brexit referendum, saying "there can be no turning back" and the government has a plan in place for negotiations on the UK's departure from the EU (source:
www.dailyfx.com).

EUR: Tensions continue to rise as the French election debates unfold. The focus for the world's second most liquid currency is the first round French election which takes place on Sunday. While polls are swinging back towards the centrist candidates and away from firebrand Marine Le Pen, the same 'status quo' assumption was applied to the Brexit vote and the US Presidential election with market-moving results (source:
www.dailyfx.com).

Technical Analysis
The pair has reached the support area and has formed a descending triangle. One thing to note is the broken symmetrical triangle to the downside, which could signal a more bearish sentimental decision. 

Scenario 1:
•If the price breaks below the support area at 0.8354-0.8305 with a pull back and a bearish candlestick confirmation, we advise a “SELL”.
•Stop loss at the high of the bearish candlestick.
•First profit target: 0.8117.
•Second profit target: 0.7950.

Scenario 2:
•If the pair closes positive at the support area with a bullish candlestick confirmation, we advise a “Buy”.
•Stop loss at the low of the bullish candlestick
•Profit target at 0.8590 resistance level

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