As outlined in yesterday’s market commentary and subsequently by the down bar which closed below the 9 day moving average, it now seems as though we are in for a period of sideways consolidation for the euros to pounds pair and indeed this morning’s higher has so far negated the down bar of yesterday. With no fundamental news on the economic calendar for either the Euro or the British Pound it is likely this pair will remain range-bound for a while oscillating between 86.25 and 84. Whilst the bias is still bearish with the 40 moving average pointing lower, we need to wait for a sustained break below 0.84 before building any further medium term positions to the downside. Any breakout to the upside is likely to be a further short squeeze rather than any longer term reversal as only a break and hold above 87.50 would justify any change in sentiment.
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