Selling the Retrace in the EUR/GBP at the 50 SMA
Skerdian Meta • 1 min read
The EUR/GBP has been quite bullish this year, as the Brexit process failed to give any positive signals for a trade deal. This has been keeping the GBP bearish, while the Euro, on the other hand, has been bullish most of this year, hence the long term uptrend here.
But, the situation started reversing in September, and the GBP is picking up pace as the UK and the EU get closer to a trade deal. The GBP has turned bullish now, outperforming the Euro, hence the bearish trend in the EUR/GBP since September.
Moving averages have been doing a good job in providing resistance during the retrace up since October, and we are once again seeing the 50 SMA (yellow) hold as resistance on the H4 chart. The price is overbought as well, so we decided to open a sell forex signal from the 50 SMA. The current candlestick looks like an upside-down pin, which is a reversing signal, so let’s hope the reversal takes place soon and the bearish trend resumes again.