Long on EUR/GBP at the 100 SMA
EUR/GBP turned quite bullish this month. The Euro declined, losing nearly 9 cents against the USD from top to bottom, but the GBP fell even more. GBP/USD lost around 18 cents, which kept EUR/GBP bullish, sending it 12 cents higher, to 0.95, from where it reversed down.
But, every big decline is followed by a decent retrace, to shuffle the cards before the next move down. So, GBP/USD has retraced 9 cents higher while EUR/USD has only retraced around 4 cents higher. As a result, EUR/GBP has retraced lower and it fell below 0.90 earlier today.
But, the decline stopped at the 100 SMA (green) on the H4 chart. This moving average has provided resistance before, so now it seems to have turned into support. We decided to open a buy forex signal down here, hoping for a bounce and a continuation of the bigger bullish trend.
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