By: DailyForex.com

The EUR/GBP pair has been falling for some time, and the month of July certainly wasn’t any different. However, I think that August might bring a little bit of a reprieve, based upon the weekly candle that had at the end of July. It was a hammer, and it does suggest a perhaps we could see a little bit of a bounce. However, if you look at the weekly chart attached to this article, you recognize that there is a large green and down arrow roughly at the 0.80 handle. I believe that level, and the area just above it, should produce enough selling pressure to continue the downtrend going forward.

I will be selling this market at higher levels after we get the bounce. I think of that he Euro will eventually find support against the US dollar at the 1.33 level, and that should have a little bit of a “knock on effect” in this market. With that, I think the market will bounce slightly, but at this point in time there’s no doubt that we are in the downtrend. Selling with the trend will be the way to go.

Easy enough trade, it will just take patience.

This is an easy enough trade, but you can see that it will take a bit of patience. You have to let the market come to you in this scenario, and try not to get too aggressive between now and then. Yes, I recognize that sometimes it’s difficult to let the market come your level, but at the end of the day if you are waiting for that right area, it gives you a trading plan, and a list of things and scenarios that have to come true in order to actually risk your trading capital.

Once we get that bounce, I think that this market will continue downwards towards the 0.7750 region. That was the low that we had seen back in June 2012, I think we are simply at this point in time making a “round-trip” to that level. Far as buying is concerned, I would have to see this market break above the 0.150 level in order to do so, something that I don’t think it’s going to happen this month.

EURGBP Week 73114

Related Articles
  1. Investing Basics

    Explaining Unrealized Gain

    An unrealized gain occurs when the current price of a security exceeds the price an investor paid for the security.
  2. Technical Indicators

    Understanding Trend Analysis

    Trend analysis is the use of past performance to predict future price movement of a security.
  3. Investing Basics

    What's a Treasury Note?

    A treasury note is a U.S. government debt security that offers a fixed interest rate and a maturity date that ranges between one and 10 years.
  4. Investing Basics

    Explaining Trade Liberalization

    Trade liberalization is the process of removing or reducing obstacles that impede the exchange of goods and services between nations.
  5. Economics

    Understanding Switching Costs

    Consumers incur switching costs when they receive a monetary or other type of penalty for changing a supplier, brand or product.
  6. Economics

    Explaining Strategic Alliances

    A strategic alliance is a business relationship between two or more entities that share recourses for a common goal.
  7. Investing Basics

    Understanding the Spot Market

    A spot market is a market where a commodity or security is bought or sold and then delivered immediately.
  8. Investing Basics

    What is a Settlement Date?

    A settlement date is the day a security trade must be settled.
  9. Investing Basics

    Explaining Risk-Adjusted Return

    Risk-adjusted return is a measurement of risk for an investment or portfolio.
  10. Taxes

    What IRS Form 8949 Is For

    Selling a painting or that lake property? Disposing of your fossil fuel stocks? You need to know about this IRS form.
RELATED TERMS
  1. Yield To Maturity (YTM)

    The total return anticipated on a bond if the bond is held until ...
  2. Gross Profit

    A company's total revenue (equivalent to total sales) minus the ...
  3. Interest Coverage Ratio

    A debt ratio and profitability ratio used to determine how easily ...
  4. Monetary Policy

    The actions of a central bank, currency board or other regulatory ...
  5. Receivables Turnover Ratio

    An accounting measure used to quantify a firm's effectiveness ...
  6. Remittance

    The term most commonly refers to money being sent via mail or ...
RELATED FAQS
  1. Why would someone change their Social Security number?

    In general, the Social Security Administration, or SSA, does not encourage citizens to change their Social Security numbers, ... Read Full Answer >>
  2. Are spousal Social Security benefits taxable?

    Your spousal Social Security benefits may be taxable, depending on your total household income for the year. About one-third ... Read Full Answer >>
  3. What are the best ways to sell an annuity?

    The best ways to sell an annuity are to locate buyers from insurance agents or companies that specialize in connecting buyers ... Read Full Answer >>
  4. How are non-qualified variable annuities taxed?

    Non-qualified variable annuities are tax-deferred investment vehicles with a unique tax structure. After-tax money is deposited ... Read Full Answer >>
  5. Are spousal Social Security benefits retroactive?

    Spousal Social Security benefits are retroactive. These benefits are quite complicated, and anyone in this type of situation ... Read Full Answer >>
  6. Is Argentina a developed country?

    Argentina is not a developed country. It has one of the strongest economies in South America or Central America and ranks ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!