EURGBP rises with the EURUSD

The EURGBP surged higher with the EURUSD but is running into 100 hour MA and the 50% midpoint of the 4 day trading range (at 0.8401-03) that has contained the up and down trading of late in the currency pair.  This level should be an area that traders lean against to take profit, with stop buying above.

EURGBP falls hard yesterday, rallies back up today

The EURGBP fell hard yesterday on the back of the UK 4% CPI inflation numbers. Today the EURGBP rallied back up on the BOE inflation report saying although inflation might rise higher, they expect that inflation would come down later in 2012 due to spare capacity.   The report was filled, however, with a lot of uncertainty with the balance being toward higher inflation (“..risks around the most likely outcome are skewed to the upside”). Nevertheless, the market  viewed the report as suggesting the central bank was not going to panic and tighten soon and the EURGBP started it’s surge back to the upside.

From a technical perspective, yesterdays fall took the price below channel support yesterday (see red area in the chart above), but downward momentum faded. By the close of yesterdays trade, the price had moved back above the channel trendline and the correction started. The Inflation Report, pushed the pair even further to the upside today. Traders who bought the dip against support were rewarded.

Now the pair is back above the upper trendline and the 38.2% retracement at the 0.8417-21 area. It is also back above the 100 hour MA at the same level (blue line in the chart).  Needless to say, staying above this level, keeps the bullish bias in tact (for three reasons). 

However, just like at the lows yesterday, a failure and move back into the channel switches the bias back to the down side. That is the risk.  

The next target resistance will come in abovve at the 50% retracement and the 200 hour MA (green line in the chart above) at the 0.8441 level. This level should find sellers from profit takers and the GBP bulls who don’t believe the report.  With two technical levels at the level, the risk for technical traders is also limited.

EURGBP turns bearish on Friday and eyes the 100 day MA

On Friday, the EURGBP fell sharply with the price moving through trendline support and the 100 day MA (currently at 0.8607). This pushed the technical bias to the downside and the pair now looks toward the 0.8550 area as the next key support level. This level corresponds to the high from from January 21st and is also where the 100 day MA is currently located (see blue line in the chart below).  With the two charts showing support, I would expect good profit taking buyers at the level.

A breakof this key level, should not be ignored. with 0.8540 followed by 0.8530 which is the 200 hour MA (green line in the hour chart above) being the next targets to the downside. 

On the topside, a move toward the 100 hour MA at the 0.8607 level currently will likely attract seller with stops above the level likely. This would be needed to turn the bias back to bullish. Before that level the 100 bar MA on the 5 minute chart at 0.8593 (and moving lower) will be a key barometer for bearish sentiment. If the price corrects and cannot get above this level, it is indicative of a stronger bearish bias for the pair. 

Eur/Gbp breaks back in to the wedge.

This is a weekly Eur/Gbp and we see here that it broke back in to a huge wedge created back in the month of Nov-2008 and stayed in this formation until May-2010 but after the break it continue to test the new resistance line. We see it break through resistance line and punch through in Sep-2010, if we see it break through the top of the wedge might create pressure for the Euro to rally against all currency pairs.

NY Evening Commentary takes a technical look at the major currency pairs

GBPUSD moves higher toward resistance area

The GBPUSD moved lower early in the day, then got a boast by comments from Chancelor of the Exchequer Osborne and on better data from CBI on the Industrial Trends (highest level on index since 2008)

EURGBP tests 100 day MA and holds resistance

EUR/GBP on the Last Day of Week

The EUR/GBP pair is hovering around the 100hr moving average after its appreciation was defended once again yesterday and with a mild attempt on today’s open by the short-term trendline resistance that has developed over the last few trading sessions. With the stochastic oscillator just below 20, the pair could have some more room to the downside before some possible short-term support at the 200hr mavg and 61.8% retracement of this weeks 140 move in the pair.

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