The established trend from the major pairs such as the Euro and the Japanese Yen has made it all possible to follow and trade within it major trend, setting the pace for a renewed strength on the cross rate of the EURGBP in particular. Mixed reports with a continued bias for a USD weakness lent support for the EURGBP to go back to the 0.8890 from a pull back corrective move down to 0.8610 major support levels. Price reversal signals were eminent through the bullish candlestick formation that started the week of May 22, 2011
Unfortunately, call of a market reversal were seen all over the market place with talks of the Sovereign debt problems of Greece contributed to the negative sentiments for traders to short sell the currency pair. As the short-lived recovery for the USD also lent support for more sellers for the Euro. However, our market view report on the 'Major correction within a Major trend' has always been the basis of consistency to maintain our overall sentiments of a continuation of the Euro and the British Pound to continue its upward trend.
The Chart above shows the indication of a continuation of the upward trend by the EURGBP from its 0.8610 price reversal. Meanwhile, the current price as of this writing is at the 0.8881, slightly above the 50% Fib of its major correction trading range.
The contrary movement of the GBPUSD lower correction due to the negative report in UK and the remarks by Trichet for the Euro; lent the support for the cross rate to confirm our speculative move to go long for the EURGBP and an equivalent short hedge for the GBPJPY as indicated on the right hand side of our article. Currently working at the 131.70 low from a high of 135.10 resistance levels.
Some expected pull backs may occur as closing of the trading week and not a lot of positions would dare be establish by now especially NFP figures are expected.
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