By Dan Eduard
The last few days have seen the euro drop against most of its main currency rivals, including the UK pound. Since the 4th of January, the EUR/GBP pair has tumbled some 330 pips, and is currently trading at the 0.8303 level. Forex traders will want to pay attention to this pair, as technical indicators are currently showing that a significant bullish trend may occur in the near future.
We will be analyzing the daily chart for EUR/GBP provided by ForexYard. The technical indicators being used are the Bollinger Bands, Williams Percent Range, Relative Strength Index (RSI) and Stochastic Slow.
1. The pair is currently trading just below the lower Bollinger Band, which is typically a sign that an upward reversal is likely to take place.
2. The Williams Percent Range is currently at the -100 level. Typically, when the indicator is between -80 and -100, it is a sign that the pair is oversold and that it may begin an upward trend.
3. The RSI is currently right on the border of being in the oversold region. Traders will want to pay particular attention to this indicator. When it crosses the lower support line, it will likely be a sign of an impending bullish move.
4. The Stochastic Slow is on its way to forming a bullish cross, in yet another sign that the euro is set to move up on its British counterpart. Now is a great time for forex traders to enter into buy positions for this pair, before the upward trend breaks out.
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.
