By: Doug Rosen
Yesterday was a very action packed day for the market considering the lack of volatility the market has been displaying during this holiday week. I am not necessarily referring to the EUR/GBP since for this pair it was just a slightly below average day.
There was some Swiss news that was released and was priced into the market about an hour after the news release. I beginning to notice that as of lately news gets priced into the market sometimes as long as an hour after it is released. I remember the news was slightly negative and it caused the Swissy to take off like a bat out of hell, the EUR/USD and the GBP/USD to tank, the EUR/CHF and the GBP/CHF to drop and the EUR/GBP rallied. So basically, the USD gained strength first and foremost, and the Swiss Franc became stronger than the EUR and the GBP. So if the USD is stronger than the CHF and the CHF is stronger than the EUR and the GBP then the USD is in fact the King of the Hill and the GBP is the weakest of all the currencies.
So the EUR/GBP has risen and has gotten closer to the 38.2 fib level which will soon be overlapped with the 21 ema. I am becoming very bullish on this pair now since the weekly candle is so far from the weekly 5 ema and the week is about over and there is no doubt that this week's weekly candle is not going to make contact with the weekly 5 ema so if I was to trade this pair I would just be looking for swing fibs to the upside until I make my way to the 38.2 fib level and preferably to the weekly 5 ema.
On the 4 hour timeframe I see higher lows, however, we have a 4 hour 55 ema in the way adding contention to the rise and top that off with the hourly 233 ema just north 15 pips or so.
My strategy is like this, a break above the 4 hour 55 ema as well as the hourly 233 ema then a retest I am looking to go long or a bounce off the 4 hour 55 and the hourly 233 and a couple lower highs then to consider shorts.
Not a very volatile time for this pair since at the time I am doing my analysis the previous hourly candle only had a range of 5 pips and the previous 15 minute candle just 3 pips.
