EUR/GBP - Expect Reactions at 0.8670

Doug Rosen

By: Doug Rosen

I start out my analysis for this pair as usual taking a quick peek at the EUR/CHF and I start with the weekly chart and it is beginning to look to me that this pair is retracing a bit and is probably heading towards the weekly ema's. There are ema crossovers taking place which makes this pair look bullish but a visit back to the ema's is what may be needed for this pair to continue up.

EUR/GBP Daily Chart - September 28, 2011

The daily chart for the EUR/CHF I see the daily Bollinger band closing in and the upper band pointing sharply downward with a 5 ema that looks like it wants to roll over a bit and stochastics is pointing down, this is all bearish leading to EUR weakness. Looking at the lower timeframe charts for this pair price appears to be in a range with a slight bearish bias. The GBP/CHF charts look almost identical to the EUR/CHF charts, however, the GBP appears to be a bit stronger than the CHF as compared to the EUR but not too much more, just a bit. Moving over to the EUR/GBP charts the slight GBP strength is noticeable. Scanning my naked charts (charts without indicators) I see that price is approaching visual support around 0.8670. Weekly and daily charts are looking bearish and the daily 5 ema laying heavy on price after crossing below the other ema's. Daily stochastics is in the trade zone yet making a bearish crossover. Price is below the monthly S1 Pivot Point and heading to last weeks low which overlaps with yesterdays low. Price does appear to be in a range yet GBP strength prevails.

EUR/GBP Hourly Chart - September 28, 2011

The 4 hour 5 ema is trying to press down on price and the same goes on the 1 hour chart. On the 15 minute chart same story, price looks bearish but we are approaching a combination of visual support as well as last weeks and yesterdays low so I would expect either a bounce that will cause EUR strength or a breakout that will increase GBP strength. So, keep an eye on the 08670 level since this is where a reaction will be expected.

EUR/GBP 15 Minute Chart - September 28, 2011

Doug Rosen
Doug Rosen is a Florida-based Forex trader who became a skilled technical trader through 3 years of intense practice and self-teaching. He now coaches a live trading room and analyzes the market on forextradeplans.com.

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