By: Colin Jessup
Yesterday the EUR/GBP pair cleared a major resistance zone at 0.8800 closing the day at 0.8830. We have been bullish on this pair for the past week and it appears to be full steam ahead now that we have crossed and closed on the upside of the 62 moving average at 0.8788. If 0.8845 is cleared we may test the two week high at 0.8885. I have been long on this pair since August 19th, after seeing the formation of a double bottom and a bullish engulfing candle at the 0.8675 level of support. Both of these bounced off of an ascending trend line (dating back to November 2007). If price continues upward its possible we will see 0.8930 which is the next strong daily support zone.
If the pair decides to drop, the bears will have to break through support at 0.8800 and then clear allot of traffic on the left. Support levels can be found at 0.8742, 0.8712 & 0.8677 with that ascending trend-line coming in around 0.8700.
It is hard to say what effect Bernanke's dialogue will have on the markets tomorrow. I for one will be watching my positions very closely.