In our original posting we identified the Euro-Pound as a forex range trading idea. We then proposed the strategy of entering a long entry order above Fib support at 0.7823 with a stop set at 0.7726. European Trade Balance figures helped push the pair down towards entry. July saw the metric widen to a seasonally adjusted record -€6.4 billion ($9.1billion) as slowing global growth continued diminishing Euro-zone export demand. Indeed the second largest buyer of European products, the U.S., saw its demand for the bloc’s goods fall the most since 2003. Wednesday’s release widely underscored expectations of a -€3.0 billion deficit and further solidified the need for policy directives towards ease.
Written by Luis Gil, Currency Strategist for DailyFX.com E-mail: lgil@fxcm.com