EUR/GBP Finds Strong Resistance at the 100 SMAs After This Morning’s Jump
Skerdian Meta • 1 min read
EUR/GBP has been trading on a downtrend in the last month or so. The pace of the bearish move slowed in the last two weeks, but the downtrend has been consistent nonetheless. This pair broke all moving averages on the H4 chart as you can see above.
Today though, there were some Brexit rumors doing the rounds in the media. It seems as the UK Prime Minister Theresa May might have to draw another Brexit proposal because the Chequers Plan is not valid anymore. I’m not sure if the EU has rejected it because we haven’t heard from the EU side just yet.
Nonetheless, the GBP has made a bearish reversal and as a result, EUR/GBP has jumped higher today. EUR/GBP moved 60 pip higher this morning, which was nearly 100 pips higher from yesterday’s lows.
But, EUR/GBP ran into the 100 SMAs which have been providing solid resistance lately. The 100 simple MA (green) and particularly the 100 smooth MA (red) are very strong indicators for this pair and the buyers were having trouble pushing above them.
As a result, we decided to open a sell forex signal below them at 0.8930. That area was the low a few weeks ago and it has been the high in the last two weeks, which means that once support, it has now turned into resistance. The stochastic indicator is also overbought now, so the retrace up is now complete. The sellers are trying to get the situation in their hands now and EUR/GBP is moving lower, so let’s see how this trade will evolve from here.