Selling the Pullback in EUR/GBP at the 20 SMA
Skerdian Meta • 1 min read
The EUR/GBP has been trading sideways since September, after the Eurozone economy started to weaken again, with services falling into contraction back then. The EU and the UK were playing hard to get regarding the Brexit deal, but we all knew they would eventually reach middle ground before the deadline.
Towards the end of December, they reached a trade deal, and the GBP started turning bullish. The EUR/GBP then turned bearish and it has been declining ever since. The decline picked up further pace in January this year, with smaller moving averages providing resistance during pullbacks on the H1 chart, which pushed this pair lower. This shows that the selling pressure has been strong on this pair.
On Wednesday, we opened a sell forex signal below the 50 SMA, which closed in profit yesterday, as the bearish trend resumed. Today, we are seeing another retrace higher, but buyers are having trouble at the 50 SMA (yellow) again, which is stopping them from pushing the price higher. The stochastic indicator is also overbought, showing that the EUR/GBP is overbought on this time-frame chart. So, we are long again on this pair, hoping that the retrace will end at the 50 SMA, and the decline will resume soon.