The euros to pounds pair continued its slow recovery yesterday, following the recent sharp sell off, which saw the pair break below the recent sideways consolidation between 0.9150 and 0.8850, to retest support in the 0.86 region earlier in the month. Indeed this hammer candle marked the turning point in the short term, and since then this signal has been validated by a steady move higher, which has been characterized with solid support from the 9 and 14 moving averages from below.  Yesterday’s candle provided further evidence of the bullish sentiment for the euros to pounds pair once again, ending the day marginally higher, but with a deep lower wick to the lower body, with the low of the day finding good support from the 9 day moving average once again. In the short term we are now approaching several key levels simultaneously, which will dictate the longer term direction on the daily chart. First we are very close to to 200 day moving average which now sits directly above, and we will need to see this breached in the next few days. Secondly we are also close to the 40 day moving average , and once again we need to see a break and hold above this key indicator. Finally we are now running into the deep potential resistance which begins at 0.8850, and once again for the current momentum to be maintained we need to see a penetration of this deep area of congestion.

Whilst the technical picture is relatively clear, the broader picture concerning Greece is less so, with today’s meeting of EU ministers seminal in stitching together a rescue package for the beleaguered country. However, it will be the tone of the statement and any associated comments from the ECB that will dictate the fortunes for the euro in the short term. With the Greeks refusing to lay their cards on the table, and the Germans suggesting that any package must be backed by deep cuts in the Greek budget, it is a question at present of who will blink first. The currency speculators are currently selling the euro in ever increasing volumes against the dollar, but against the UK pound of course it is a different story, with sterling suffering its own woes, and from the current daily chart. likely to fall a great deal further given the recent breakout on the daily chart. Fundamentally of course for this pair it is simply a question of which currency is more of a basket case than the other! At present the euro is winning, and provided we see the technical levels breached, then  this upwards trend should continue in the short term, particularly if the news later from the EU meeting is euro positive which is likely.

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The euros to pounds pair continued to trade in a narrow range yesterday, ending the currency trading session with a narrow spread up candle, with small shadows to both top and bottom, and which once again reinforced the indecisive market conditions that are currently exhibited by many other currency pairs at present. Whilst yesterday’s price action provides little clue to today or the near future, the candles of Wednesday and Friday last week are more illuminating ( excuse the pun), and with their deep lower wicks suggest a market where the bulls are buying into any reversal lower, and suggesting that we should see the euros to pounds pair rally in due course from the current price range. The strength of any move higher will depend on the support from below, which is now well established in the 0.8850 price region, and provided we see a break and hold above the 0.91 and 0.9150 price levels, then the pair should continue to rally further with the prospect of a move back to retest the 0.9350 price area in due course. Whilst parity remains a long way off, any negative sentiment towards Sterling is likely to be reflected in the pair, and with the UK General Election now looming in the distance, this could be the trigger for some interesting and volatile moves in the UK pound. Technically, the moving averages remain broadly supportive, but their value is limited at present due to the tight bunching.

The main $undamental newss week for the euros to pounds pairs is of course the ECB rate decision on Thursday, and whilst rates will almost certainly remain on hold for the time being, it is the rate statement itself which will be closely watched and analysed for any clues as to future policy from the Bank, as Europe recovers from recession, but weighed down by some of the weaker partners such as Greece. For the UK the main item of news this week is the Manufacturing Production figures, due tomorrow. No doubt Mr Brown will put his usual spin on the figures to assure everyone that all is well while he is at the helm – as the ship slips quietly beneath the waves, holed and with a ton of debt as ballast to make sure she sinks fast!

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If you would like to follow my trading more closely, why not join me in one of my FREE live training rooms - simply click the link to join – I look forward to seeing you there – regards Anna

The euros to pounds currency pair continues to consolidate in a relatively narrow trading range, and having established a relatively strong platform in the 0.8850 price region, the question now of course is will this provide the platform for a sustained move lower? Technically the daily fx chart for the euros to pounds pair is starting to take on a bearish flavour, with the lower highs of the last three up moves, suggesting that the market is running out of steam, with yesterday’s minor shooting star simply confirming this view. The key technical levels in the short term on the daily fx chart are now in place at 0.9150 to the upside and 0.8850 to the downside, and no doubt the euro will be influenced by this afternoon’s NFP data which is due for release shortly, with US dollar positive news prompting a possible sell off in the euro which may also be reflected in the euros to pounds pair to some extent, but with the UK economy still languishing in recession the pound is more of a basket case than the euro at present!

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A curious start to the New Year for the euros to pounds pair, which seems to have found some traction from the 0.8850 price level, with Monday’s wide spread up candle providing the basis for a strong recovery in the currency pair from the sideways consolidation of the last few weeks of 2009. However, whilst the euro pound bulls are no doubt delighted, this is far from a sustained longer term reversal higher, as technically we are still deeply embedded in the wide and deep price congestion of late 2009. With all three moving averages intertwined, there is little to suggest that a move higher is likely to be supported, and the only indication we have at present, is the strongly bullish signal of the deep lower wick in today’s currency market price action, suggesting that we should see a continuation of the move tomorrow. Beyond this, we need to see a break and hold initially above the 0.9150 price level, followed by that at 0.9250 and ultimately the top of the last rally in the 0.9450 region, and should this be achieved then we may well see a further attempt to breach parity in due course. In the short term of course, the currency rally needs to continue, which now looks likely, and provided we do not see prices stall at the 0.91 price handle, then the moving averages should begin to provide strong technical support once again as we look for a breakout above the recent consolidation zone on the daily chart.

What is one of the best retail forex trading platforms?  In my view it is Metatrader 4.  Advanced, powerful & intuitive it now comes with ECN execution, so you can happily scalp away without broker or dealer intervention.  Just download your free demo copy of MT4 by following this link – download metatrader free -  and get started today.  Don’t forget to follow my daily posts for updates and analysis of the $orex marketshelp you with your forex trading – so good luck and good trading.