EUR/GBP’s Test of Support Could Offer Scalping Opportunity
The Euro and Pound both saw considerable volatility overnight as speculation that China was diversifying their Euro denominated holds weighed on both currencies. However, Chinese officials quickly squashed the rumors by confirming their commitment to investing in the region. The two currencies have started to become correlated as the U.K. economy is dependent on the Euro-area, shipping 50% of its exports to the region. Therefore, we have seen the pair begin to settle into a range and today’s failure at the lower bound could see it continue to trade sideways, making it a solid scalping target.
Key Technical Levels
The EUR/GBP continues to find support at 0.8450 and today’s failure adds validity to the level which should be targeted for entering and exiting positions. A loose range is developing with the upper bound potentially at 0.8650 despite recent breaks above. An ascending intra-day channel is the ideal formation for executing a traditional scalping strategy.
The EURGBP has seen its ATR hold near 116 pips as Euro volatility has impacted the pair. However, the pair’s daily range is still smaller than the pair’s listed below making it a safer target for scalpers. The Bollinger band width for the pair has also remained steady near 356 pips which is also near the bottom of the most traded pairs. The consistent nature of the technical indicators increases their reliable as gauges for scalpers.
To Discuss Scalping Strategies and Get Tips From Other Traders Visit The Scalping Forum.
To discuss this report or be added to the email list, contact John Rivera, Currency Analyst: firstname.lastname@example.org
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.