Euro reverses at support (11th of February 2013)
Pound rally was very short
term and Euro resumed its trend today. So, we can assume that we can safely
adding on dips in eur/gbp pair. Another way we could day trade that is buying
above the current resistance of 0.8570. No data came neither from Europe, nor
from Great Britain (well except Euro finance ministers meeting) and Euro rose. It
means market is readjusting itself for trend resume. Data from Great Britain
tomorrow (Consumer Price Index) can trigger more sell off of the cable.
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Trading ECB rate decision (7th of February 2013)
One more pair that could
have been traded very profitably during ECB rate decision was eur/gbp. To tell
the truth I think it is one of the best pairs to trade news. Why? Because it is
not very volatile and if this volatility can sometimes hit your stops just to
reverse a few minutes later, eur/gbp rarely experiences that and stops stay not
touched while market continues moving in the direction you had predicted. So,
you could enter a short order below 0.8596 (with a stop of 20 pips) and a take
profit at a support level of 0.8555. Nice trade!
Third strong day in the pair (5th of February 2013)
Another slightly surprising
day for eur/gbp. Could you expect this? We had a huge move upwards on Friday.
Then a reversal came that erased all of Friday’s gains on Monday. Today Euro
gained back what it lost yesterday. I better wait for market to calm down. I
need to see what happens on Thursday and after the release. It will be clearer
regarding fundamental policy of ECB and BOE and technical levels become clearer
by that time too. So, I am staying out and not taking any positions in eur/gbp
for the time being.
Profit taking before Thursday (4th of February 2013)
Technical analysys (2nd of February 2013)
Very strong day for the
pair! It is pretty unusual for a pair to rise more than 40 pips. Today it rose
more than 130 pips. Extraordinary trend for eur/gbp! Use all Europe and US news
releases to go long in eur/gbp. The sentiment
for the pound remains extremely bearish. Counter trend moves are short lived
and they are opportunities for traders to jump back into trend by adding to
their long Euro positions. As of now Euro is the strongest currency and Yen is
the weakest. The second weakling in a row is Pound. You may diversify by
shorting these two currencies against Euro till trend changes.
Trend (30th
of January 2013)
eur/gbp left behind 0.8500
level and continues marching. I am not going to trade the pair for some time as
I do believe the rally is overstretched as I do not want to be caught when
market reverses. A reversal will be very sharp and dramatic. So, let it ride.
Today’s price action after FED release will show what is going where. Be
careful as this optimism in a sinking Europe economy is not justified.
Nothing new for today (28th of January 2013)
Unfortunately, I do not have
anything new to say about eur/gbp today. I see that the rally upwards is
overextended, 0.8500 my predicted final target is reached and I expect some
reversal pattern to form before going short. I do not want to start catching
falling knives. Nobody really knows whether the final top is in place or not.
Therefore, I wait for confirmation signals from market itself: bearish candle
patterns on daily charts, 123 patterns and a few more.
Volatility rises (25th of January 2013)
This non volatile pair has
been very volatile recently. It even went through 0.8500 level and is above it
now. I do not know what other possible resistance targets could be for the
pair. I was calling for a reversal in Euro this week and this did not happen.
Now I have to do the same for next week. The idea is simple: we have reached very
important resistance areas on weekly charts. Weekly charts and levels on those
are very important. eur/gbp has just hit 200 sma on a weekly chart. In my
opinion it is high time for some consolidation and more profound reversal,
possibly to 0.8200 level.
David Cameron comments (24th
of January 2013)
David Cameron’s comments
regarding Great Britain leaving EU and a possible referendum on the question
pushed pound to new lows. Euro is approaching its ‘final resistance’ of 0.8500.
I do not know if it can go any further, but in financial markets it is
dangerous to speak about some currency being too overbought or too oversold as
markets tend to be in inertia for a long time as trends are in progress. So,
let markets run and if you find good levels to enter in the direction of a
trend jump in and have a ride. This week, however, might be the last for Euro
bulls.
Collapse (22nd
of January 2013)
Seems like Euro bulls got
tired as prices collapsed today. Support now stands 0.8375. If that is broken
we might see much lower prices very soon. The move upwards is overextended and
may finish any time. I still expect Euro to go down this week. It will be
reflected in most Euro pairs. Well, maybe all of them. eur/gbp resistance is
now at 0.8405. If that is taken out the second one is the highest high of
0.8440. I expect 0.8260 to be reached soon.
Bearish candle (21st
of January 2013)
Today we have a small
bearish candle on a daily chart of eur/gbp. As the day is not over yet we
should not make too hasty conclusions about that. However, I think we are very
close to a long term top in the pair. It still has potential to reach 0.8500 level
as you can see from the weekly chart below. I am standing aside and have no
intentions to trade the pair for the time being. Need more daily candles to
form before the technical picture becomes clearer.
Narrow range (18th
of January 2013)
Rally continues (17th of January 2013)
eur/gbp continued its rally
upwards without stopping today. What does it tell us? By looking at daily chart
I see that this move (that has been in waves) is the strongest from all waves.
This also tells me that a significant reversal may come any time. The last
thrust in trends is usually the strongest that is all the time followed by an
opposite move of a similar strength. It tells us that the stronger eur/gbp
rallies, the stronger it will fall in due time, which may be sooner rather than
later.
No reversal yet (16th of January 2013)
Long move upwards maybe over(15th of January 2013)
eur/gbp as most Euro pairs have been in a long uptrend. However, if you look closely how it has been advancing you will see that its going up has been in waves. Every peak has been followed by a sharp correction. There has been 5 wives up and 4 down since the end of July. The fifth top has probably been reached yesterday (on the 14th of January). If the scenario continues this peak should be followed by a collapse (profit taking and extra short positions in eur/gbp pair). Today saw an engulfing candle (bearish) that ended up lower than yesterday’s low.
eur/gbp as most Euro pairs have been in a long uptrend. However, if you look closely how it has been advancing you will see that its going up has been in waves. Every peak has been followed by a sharp correction. There has been 5 wives up and 4 down since the end of July. The fifth top has probably been reached yesterday (on the 14th of January). If the scenario continues this peak should be followed by a collapse (profit taking and extra short positions in eur/gbp pair). Today saw an engulfing candle (bearish) that ended up lower than yesterday’s low.
By looking at the chart
below you will notice that the collapses have been somewhat sharper than rises.
If the collapse starts tomorrow I believe support can come around 0.8160 level.
A breakout trade by selling below today’s lows is a possibility. Resistance is
quite close at 0.8295.
