Yesterday’s candle chart for the $uros to poundsrong> pair has provided us with a strong buying signal, ending the day with a deep hammer candle which closed the trading session with a narrow body and deep lower wick indicating that the euro bulls are buying in force and on any deeper move lower, indicating that the bullish trend remains firmly in place. This analysis is further confirmed by the support the pair found yesterday from the 9 day moving average, always a good indicator that the sentiment in the move remains unbroken, and as such we should see a strong bounce higher in the next few days if this excellent signal is confirmed today. The key of course will be whether the euros to pounds pair manages to break above the dark cloud over candle of Monday, and is so then we should expect to see a continuation of the upwards progress of the last few weeks, ultimately breaking through the strong resistance ahead and into the calmer waters above in the 0.95 region and beyond.

There are several items of news on the economic calendar today for the euros to pounds pair which starts with German Retail Sales which are expected to remain flat at 0.0% down from last months more positive figure of 0.7%, which is then followed by the European Final Manufacturing PMI data which is forecast to remain flat at 49, as for last time. The same data set is also being released in the UK shortly after with a slightly better forecast for the UK of 50.2 against a previous of 49.7. This data is followed by a report from the Bank of England which is released quarterly and provides an overview of credit conditions in the UK, which may show once again that credit is still not flowing into the banking system, with many preferring to pay off existing loans and credit cards and not to spend, as is the case in the US markets at present. Finally, throughout the week we have the Halifax HPI data which provides a view on the UK housing market for the euros to pounds pair.

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