By: DailyForex.com

The EUR/GBP pair had a very negative session on Tuesday, breaking below the 0.80 handle yet again. The shooting started formed on Monday of course was the first sign that the market was about to fall apart, but what I believe is truly driving this market is the British pound itself, not necessarily some kind of concern with the Euro. After all, the EUR/USD pair did in fact shoot straight up during the session, but the GBP/USD pair has broken above significant resistance on the longer-term charts, which means that the British pound should be free to go much higher in general. I believe that this move in this market is simply a function of that.

I’m not ready to quite start selling yet, as this market has a little bit of support just below, and I think a move below the 0.7950 level is in fact that the “green light” to start selling again and aiming for much lower levels. In fact, I believe the 0.75 level is where this market is getting ready to go, but it will take quite a bit of time to get down there obviously. On top of that, this pair tends to move very slowly, but keep in mind that the pip value is much higher as well. In other words, you don’t need as big of a move to make money.

Don’t fight the trend.

The candle is very strong looking for the sellers, and as a result I think that there will be continued pressure. After all, we did manage to close at the very lows of the day, so this means that there should be plenty of selling pressure today as well. With that, I think that a breakdown is imminent, and it should be a nice move waiting to happen, but it is not until we close below the level that I’m willing to actually risk trading capital. Ultimately, I will not fight this trend as it is obviously in favor of the British pound, and I think any bounce from here should be a nice selling opportunity.

EURGBP 7214

Related Articles
  1. Mutual Funds & ETFs

    ETF Analysis: iShares 10-20 Year Treasury Bond

    Learn about the iShares 1-20 Year Treasury Bond ETF and its holdings, and understand why investors may be better served to look at other bond funds.
  2. Mutual Funds & ETFs

    ETF Analysis: iShares Global Telecom

    Learn about the iShares Global Telecom exchange-traded fund, which invests in U.S. and foreign telecommunication companies with high dividend yields.
  3. Chart Advisor

    Gold Struggles to Climb Higher and May Fall Soon

    Traders will be watching the price of gold over the coming weeks. We'll take a look at how a couple major moving averages are suggesting that the next move could be lower.
  4. Economics

    Is a Recession Coming?

    In the space of a week, the VIX Index, a measure of market volatility, spiked from 13, suggesting extreme complacency, to over 50, evidencing total panic.
  5. Technical Indicators

    Use Market Volume Data to Determine a Bottom

    Market bottoms often carve out classic volume patterns that let observant traders make fast and accurate calls.
  6. Forex Strategies

    These Are The Best Hours To Trade the Euro

    Six popular currency pairs and numerous secondary crosses offer euro traders a wide variety of short- and long-term opportunities.
  7. Professionals

    Tips on Building a Resume for a Private Equity Job

    Trying to land a job in the coveted private equity sector? Ensure your resume meets the stringent PE job requirements with these important tips.
  8. Savings

    Best Places to Exchange Currency in Chicago

    Whether you're leaving the Windy City or arriving with a stack of foreign cash, these are your best bets for currency exchange.
  9. Mutual Funds & ETFs

    ETF Analysis: United States Brent Oil Fund

    Learn more about the United States Brent Oil exchange-traded fund, the characteristics of the fund and the suitability and recommendations of it.
  10. Mutual Funds & ETFs

    ETF Analysis: ProShares Ultra Bloomberg Crude Oil

    Find out more about the ProShares Ultra Bloomberg Crude Oil ETF, the characteristics of UCO and the suitability and recommendations of UCO for investors.
RELATED TERMS
  1. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s ...
  2. Theta

    A measure of the rate of decline in the value of an option due ...
  3. Record Date

    The cut-off date established by a company in order to determine ...
  4. Supply

    A fundamental economic concept that describes the total amount ...
  5. Purchasing Power

    The value of a currency expressed in terms of the amount of goods ...
  6. Investment Banker

    Someone working at an institution raising capital for companies, ...
RELATED FAQS
  1. Can my IRA be garnished for child support?

    Though some states protect IRA savings from garnishment of any kind, most states lift this exemption in cases where the account ... Read Full Answer >>
  2. Why is my 401(k) not FDIC-Insured?

    401(k) plans are not FDIC-insured because they are typically composed of investments rather than deposits. The Federal Deposit ... Read Full Answer >>
  3. Can I use my IRA savings to start my own savings?

    While there is no legal reason why you cannot withdraw funds from your IRA to start a traditional savings account, it is ... Read Full Answer >>
  4. Can creditors garnish my IRA?

    Depending on the state where you live, your IRA may be garnished by a number of creditors. Unlike 401(k) plans or other qualified ... Read Full Answer >>
  5. Is Japan an emerging market economy?

    Japan is not an emerging market economy. Emerging market economies are characterized by low per capita incomes, poor infrastructure ... Read Full Answer >>
  6. How does an IRA grow over time?

    Individual retirement account, or IRA, growth depends on many factors, including what types of investments are included in ... 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!