Yesterday’s doji candle on the daily chart for the euros to pounds pair indicated a degree of indecision in the market and a possible pause point in the current steep fall, and indeed this has translated into a short squeeze higher in early trading today, which should be seen as an opportunity to enter further short positions in preparation for a deeper move down in due course. With all three moving averages pointing lower the downwards trend will only be interrupted if the 9 and 14 day moving averages are breached in any significant way and the strong resistance now in place both at 0.86 and 0.8750, should a resolute barrier to any move higher. The only fundamental news on the economic calendar for Europe this morning was the release of the Trade Balance Figures which came in better than expected at -0.3 against a forecast of -1.5, and for the British Pound it was the unemployment figures which were slightly better than expected at 7.2% but still building towards a total of 3m by early next year. My trading suggestion is to continue to look for short positions in the hourly chart with a short term target of 0.80.
You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links. I have also included details on an excellent ECN broker.
