The EUR/GBP pair has been a nice one way trade lately. This is the kind of trade I prefer, as the trending nature of Forex is what makes this the best market to trade on the planet. The ability to simply pick a position and add to it as you go along has been the source of my biggest gains over the last several years. However, as many of you know – the markets have been very choppy over the last year or two, and not all of the major pairs have been behaving in a trending manner for any real length of time.
The pair has paired up one currency that is from the European Union, and that region’s problems. It makes sense that the Euro would suffer against many other currencies as the whole center of the economic issue globally is Europe itself. The United Kingdom on the other hand is in a recession, but only a slight technical one at that, and as the markets hate uncertainty, many traders feel better about the UK than the EU.
Was support, could be resistance.
The pair rose during the session on Monday to hit the 0.8150 level again. The area was the site of support a few sessions back, and now as classic technical analysis tells us, this should be resistance. Certainly it would make sense as the trend is very bearish lately. However, this is only a minor area, and as such I am willing to wait until a daily close that looks weak in order to sell this market.
.png "EUR/GBP Daily 5112")
The daily close will be important, and if I don’t get a shooting star, long red candle, or other potentially bearish action, I am willing to wait. In fact, the higher this pair travels, the more interested I am in selling this market. I also see the 0.8225 level as potential resistance as well, and more significant. If I don’t get the selling opportunity that I am looking for on this pair in this area now, I am willing to wait until I see weakness at that level.