Going Long on EUR/GBP at the 50 SMA
EUR/GBP has retraced lower today on BoJo's comments, but the retrace is complete now at the 50 SMA once again
In the last couple of weeks, I have highlighted the uptrend in EUR/GBP, as we have picked a few trades on the long side in this pair. The trend has been pretty consistent since the beginning of May, with EUR/GBP climbing more than four cents higher and even breaking above the 0.89 level this week.
During the first few weeks of the climb, the trend was pretty strong and the 20 SMA (grey) was providing support and pushing the price higher, as it is usually the case with smaller period moving averages during strong trends. In the second half of this uptrend, the pace slowed and the 50 SMA (yellow) caught up with the price.
Today we saw a retrace lower as the GBP received some bids on Boris Jonson’s comments that he is not aiming at a do-deal Brexit. But, the 50 SMA held its ground well and the price has bounced 20 pips higher off it. The stochastic indicator is oversold on the H4 chart so the pullback is complete. We opened another buy signal in this pair a while ago, now we’re waiting for the bullish trend to resume.
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