- The euro bounced a bit during the early hours on Monday as it looks like the 0.85 level is going to give a little bit of support, especially as the 50 day EMA sits just below all things being equal.
- This is a market that I think given enough time probably sees an attempt to break above the 200 day EMA.
If we do in fact break above the 200 day EMA, then it's possible that the market could go looking to the 0.86 level. That being said, this is a market that I think continues to be very noisy and that is typical for this type of currency pair as the market continues to see a lot of noisy behavior. If we can break above the 0.86 level,
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I’m Still Inclined to Be Bullish
It's likely that we could go much higher at this point, and that could open up a move to the 0.8750 level, possibly even the 0.9 level. From a longer term perspective, this is a market that has been testing a major support level on the monthly chart. So, all things being equal, I think this does make a certain amount of sense. It isn't necessarily that the euro is going to be the be all end all of strong currencies, it's just that we had gotten a bit overzealous to the downside and now we are going to try to find some type of normalcy. In fact, you can see that even just rallying to the 0.8750 level in the longer term chart would just put us basically into a state of normalcy. So, I think all things being equal, dips will continue to be value in this pair.
That being said, you also have to realize that EUR/GBP is a pair that is quite choppy and erratic as the 2 economies are so highly intertwined. Because of this, you will need to be very patient and recognize that it may take some time for the trade to play itself out.
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