Euros To Pounds Daily Candle Chart - January 27th 2009

Euros To Pounds Daily Candle Chart - January 27th 2009

A very interesting day on the $uros to poundsrong> currency pair yesterday for two reasons. First, the pair opened gapped up in early trading yesterday, which is often a signal for prices to move in the direction of the gap up ( or gap down). Secondly, the resulting candle for yesterday has given us an evening star, which could be the first signal of a reversal in the current bullish trend. The evening star ( as the name suggests ) is a small doji candle, which ” hangs in the sky” above the other candles, and provided we see a confirming down bar today, to complete the signal, then this could confirm a short term move from bullish to bearish sentiment in the euros to pounds exchange rate. For this move to be sustained we will need to see a penetration of the 7 and 14 day moving averages and a move below the support level set at 0.89 would confirm this as a longer term move to the downside. I would not suggest trading in euros to pounds today on an intra day basis, until we have a confirmation signal of the trend, which may arrive tomorrow.

The short term trend is still bullish, the medium sideways and long term trend may be bearish