Yesterday’s wide spread down bar for the $uros to poundsrency pair, finally added some much needed momentum to the downwards ‘drift’ we have seen in the pair for the last few weeks, and more importantly closed below the strong support level at 0.8660, which had been providing a temporary barrier to any move lower. With all three moving averages now weighing heavily down, and with the euro benefiting from the renewed strength of the UK pound, we should expect the pair to fall further in the next few weeks, and my initial target is the 0.8400 – 0.8450 price region. Should this level be breached then we could see a deeper move to retest the 0.80 region last seen almost twelve months ago. My trading suggestion for today is therefore to look for longer term trend trades using the intra day charts for your entry points, and with any stop loss set above the previous highs at 0.9025 or above. The weekly chart for the euro pound pair shows a similar picture with this week’s trading having finally crossed below the 40 week moving average, and whilst there are intermediate levels of support, the major level is clearly in evidence at the 0.80 region, and any move beyond this will need considerable momentum to break and hold below this area.

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