Where Does Our EUR/GBP Signal Stand?
Skerdian Meta • 2 min read
As mentioned in the previous market update, GBP buyers are enjoying some good times after the UK construction report failed to spread panic. The number was 2 points lower than the previous month, but despite that, this sector of the UK economy remains pretty upbeat.
In fact, other developed countries dream of having 55.9 PMI points for their construction sector. That´s a good thing for the UK economy, which also shows that the UK consumer remains robust and unaffected by all this Brexit uncertainty. GBP sellers got relieved that it wasn´t worse.
However, it´s not good for our forex signal as we bought the Euro against the British Pound. Now the price in this forex pair is about 20 pips below the entry level so we´re in red as I speak.
Let´s hope the uptrend resumes soon.
The prior support level at 1.08 has now turned into resistance and is provided strong resistance since last evening. That´s not a good thing either for our EUR/GBP signal because we want the Euro to go up, while the GBP to fall.
They have been doing the opposite of that this morning, but the good thing is that it has stopped now. EUR/GBP is not falling anymore and the last hourly candlestick closed as a doji, which is a trend reversal patterns, according to the forex textbooks.
Besides that, as you can see on the H1 forex chart above, this pair is oversold on the H4 chart and particularly on the H1 EUR/GBP chart, since both stochastic and RSI indicators are oversold.
On top of that, the trend has been up in the last four trading days, so we´re on the good side, right?
The most important indicator for me, though, is the 100 moving average (100 SMA) in green, which has provided resistance before. So, that´s the most comforting technical indicator for me right now regarding this signal.
In total, the indicators pointing up are more than the ones pointing down. However, the forex market doesn´t always care for indicators, so let´s hope other forex traders see what we are seeing, enter on the long side, and turn the price around soon.