By Greg Holden – The EUR/GBP has been receiving some support at its current price level. We can see on the chart below that the pair has touched the 0.8500 price mark and hurriedly bounced off. The EUR has been falling amidst debt concerns in the euro zone’s periphery, but it appears the British pound’s recent sell-off against other pairs, such as the USD and JPY, has assisted in a modicum of support for the EUR, at least against this currency.
What is also worth noting is the fact that the RSI and Stochastic (slow) indicators both reached into the over-bought region during the pair’s downward descent, but have since exited this area. Their breach of the over-bought region was an indication to sell, but their hasty retreat may indicate that technical pressure has begun to shift into a bullish posture.
If the Stochastic (slow) on the chart quickly reaches into the over-sold region, where it appears to be heading, this could support the technical correction we’re seeing on this pair. The RSI is less likely to provide direction unless the pair moves in a highly volatile manner. Traders should therefore pay closer attention to the Stochastic today. If it drops below the over-sold region, the pair may find further upward support. If not, we could see the downtrend of the EUR persist into the weekend’s close.
EUR/GBP – Weekly Chart
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.
