Regardless, this is going to be a choppy market but that’s normally the case between these 2 currencies as we have so much in the way of cross-border trade between these 2 economies, even though Brexit happened.
- When you look at the chart between the Euro and the British pound, you can see that the 50-Day EMA has offered a bit of a trendline for this market.
- At this juncture, it looks like the 0.88 level has offered support, and of course, we have bounced just a bit from the area as it shows a certain amount of signs of support.
- If we can break above the candlestick during the trading session on Tuesday, then we can start to continue to go higher. We have been grinding for a while, and it now looks as if the British pound ease going to continue to struggle.
Even if you don’t train that this particular pair, it’s an important currency pair to pay close attention to, because it can give you an idea as to which one of these currencies will do better or worse against the greenback, which of course is a major measuring stick. If we do break down below the 50-Day EMA, then I think the 200-Day EMA near the 0.87 level is your next support level. That is an even bigger trendline and of course, a technical indicator that a lot of people pay attention to. Anything below there opens up quite a bit of selling pressure, opening up this pair down to the 0.83 level.
You can even make a bit of a channel at the start, and we are close to the bottom of it. Because of this, I think it is only a matter of time before we bounce, perhaps trying to go to the 0.90 level above. In fact, when you look at the 0.90 level, it’s the area that we slammed into with the real candlestick bodies, ignoring the massive wick that formed several months ago. In other words, it’s where the real trading has been, so it would not surprise me at all to see this market try to test that area again.
Regardless, this is going to be a choppy market but that’s normally the case between these 2 currencies as we have so much in the way of cross-border trade between these 2 economies, even though Brexit happened. Regardless, keep an eye on your position size due to the fact that it is a very noisy pair.
Ready to trade our Forex daily analysis and predictions? Here are the best Forex brokers in the UK to choose from.