EUR/GBP is undergoing a retracement - SocGen

Research Team at Societe Generale, notes that the EUR/GBP faced resistance at the multiyear descending channel limit near 0.81/0.8150 and has been undergoing a retracement.

Key Quotes

“The pair has confirmed a H&S on daily chart which indicates the down move is still in force. Short term though, the pair has almost achieved our advocated target of 0.7560/0.75, graphical levels and a projection for the ongoing correction. This is also close to the 50% retracement of the recovery since last July and the lower limit of a descending channel from April highs.

Short term, it has confirmed a H&S and has achieved our initial target (0.7650). It is now approaching towards previous highs near 0.7560/0.75. Right shoulder at 0.7935/50 will be a hurdle near term.

With daily RSI close to a floor, a pullback can be expected towards 0.7660. Neckline of the pattern at 0.7780 will confirm if a larger rebound takes shape.”