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Euros To Pounds ( EUR/GBP) – Daily Chart 3rd February 2009

Following Friday’s wide spread down bar, we had a significant signal yesterday with the bullish “Harami” candle being formed on the day for the $uros to poundsrong> pair. This is an interesting pattern as the open and close of the candle are contained within the body of the previous candle, and is often a signal that the trend is over and a reversal is likely to follow shortly. The only issue I have though is that for the candle to carry more weight, the trend needs to have been in place for some time. With the euro pound pair, the move downwards has only been significant in the last few days, and therefore I would temper my advice with caution. My suggestion therefore for today would be to attempt small long positions with a stop loss below the 0.88 level. There is little in the way of fundamental data out today.

The short term outlook is bullish, the medium term is sideways and the long term bearish.