- The euro has initially gapped lower against the British pound only to turn around and find this footing again.
- We find ourselves near the 0.8550 level and the market has seen some action here previously.
- So, it’ll be interesting to see how this plays out. Any short-term pullback should see plenty of support near the 0.85 level as it is a large, round, psychologically significant figure and an area that’s been important previously.
The 50-day EMA is racing towards it and you can see that it could offer a little bit of support. Now, that being said, the market break into the upside faces challenges in the form of 0.86, but that opens up the door to 0.8650. That being said, this is a market that will have a lot of overhang to do with at the moment.
Slow Mover Most Times
Understand that this pair does tend to move somewhat slowly, and therefore I think a lot of retail traders look past it, but it’s a great swing trading pair to get involved with. I think at this point in time, there is a pretty significant cluster above, and it might be difficult for the euro to continue beyond the 0.8650 level.
This is a market that tends to frustrate those who are looking for quick and big moves, so be aware of that. This is a great measuring stick as to which one of these two currencies you might want to trade against the US dollar and in which direction because in this case the euro is stronger than the pound over the last couple of weeks and you will see that the euro has outperformed the British pound against the greenback. So, you can triangulate with this chart as well, using it as an indicator.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.