Key Technical Levels
The EUR/GBP is trading at the 200-Day SMA at 0.8870 which may serve as staunch support for the pair. Price action has remained above the technical level for the most part since mid September. The one breach saw the pair reach below to touch the 100-Day SMA at 0.8833 on November 17, which offers additional support. Although, a bullish retrace is a possibility given the recent one way price action, broader Euro weakness diminishes the chances of an uptrend developing.
Quantitative Metrics
A widening Bollinger band and a declining ATR gives mixed signals for EUR/GBP clouding its potential as a scalping target. The pair has been in a steady decline which has increased the standard deviations from the 20-Day SMA, but with a width of only 189 pips it would be it at the bottom of the most active pairs. Additionally, a daily range of 77 pips speaks to the pair’s tradition of low volatility as we see with the current bearish trend. The Euro has declined in small increments against the pound in contrast to the sharp bearish moves that it has seen versus the greenback.
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To discuss this report or be added to the email list, contact John Rivera, Currency Analyst: jrivera@fxcm.com
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