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Pound Euro Technical Analysis 7 Oct 2009

The strong bullish signals of last week duly delivered on Monday and Tuesday, with the $uros to poundsr surging higher once again, and recovering the lost ground following the dark cloud over signal which created the initial move lower. The most encouraging signal for euro bulls is that the strength of the move is now well established indicated by the 9 day moving average which is providing excellent support as we move higher with yesterday being a classic example with the low of the trading session bouncing off the average once again. With all three moving averags pointing firmly higher, the only issue now is how far will the euros to pounds pair go in this move before the market takes a breather once again, and the first point is a break and hold above the dark cloud candle at 0.93. Once this is breached then we have a virtually clear run back to re-test the previous high of 0.96.  Should this level fail to hold then then parity becomes a distinct possibility particularly if Sterling continues to suffer as seems likley.  So from a $echnicalspective the tone remains firmly bullish in the short to medium term for the euros to pounds pair.  With no significant $undamental newsthe economic calendar for either the UK or Europe other than some second tier releases the market now waits for tomorrow’s interest rate decisions for both Sterling and the Euro.  In the meantime Sterling has continued its slide on the Sterling Index as economic recovery in the UK continues to stutter and splutter.