The fragile recovery in the euro to pounds pair continued yesterday creeping marginally higher on the day but the daily candle closed with a bearish flavour given that the deep upper wick found some resistance from the 40 day moving average which impeded its progress during the trading session.  Nevertheless, the hammer candle of last week seems to have been validated and indeed once again this morning we are seeing an effort to break through the 40 day moving average.  The key for any longer term reversal higher will be at the intermediate resistance level clearly defined in the 0.88 region and should we see this penetrated followed by a break and hold above the 0.8950 region then this will confirm that the reversal may have some way to travel.   Support from all three moving averages will confirm this picture.  Today’s items of $undamental newsthe economic calendar provided a boost to the Euro with both the French Trade Balance and German Factory orders coming in much better than expected, indeed the German data is the best in over 2 years.  This was combined with much worse than expected manufacturing and industrial production figures for the UK has helped the drive Sterling lower and the Euro higher.

You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links.  I have also included details on an excellent ECN broker.