Selling the Retrace Higher in EUR/GBP
Skerdian Meta • 1 min read
EUR/GBP has been trading on a bearish trend since the second week of September, when it reversed down from below 0.93. The Eurozone economy started to weaken in autumn which started to weigh on the Euro, while the prospects of a Brexit trade deal between EU and UK, hence the bearish trend since then.
We could draw a descending trend line, but the trend is not very straight. Although, since the end of September moving averages have taken over in placing a lid on retraces higher and they have been pushing EUR/GBP lower to 0.8860 on Wednesday.
The 100 SMA (green) has been the ultimate resistance on the H4 chart for this pair, but the 50 SMA (yellow) has also helped. In the last two days though, the GBP has turned bearish and EUR/GBP retraced higher. But the retrace seems to have ended around the 50 SMA, so we decided to open a sell forex signal earlier on this pair.