Trend Following EURGBP Cross

The recent Euro recovery from its lows were simply a relief short lived rally with supporting evidence of Euro Zone leaders to support Greece and neighboring countries necessary to sustain stability in a crucial financial crisis that would reverberate throughout the financial markets.

The upward Euro extension to as high as 1.3689 met its 1st R1 in line with its 21 day moving average where certain pull backs as the corrective US dollar found some support at the 77.30/45 basis point pivotal price reversal. Currently at the 78.29 recovery level as of this writing.

The relative price reaction seen from the EURGBP cross came about when the price levels came touching the 0.8738/50 range resistance and currently working its way back south at the 0.8667 price level where a second attempt to the downside would occur as the end of the month liquidation and position adjustment for the third quarter of the year ends in a negative tone for the Euro Pound cross. Which so happens as the continuing down trend re-establishes its footing. There is no real sign of a continuing rally as almost all indicators have reaffirmed their bearish sentiments remain in the market place.

The daily chart configuration is a small version of the overall picture and likewise the inverse relation of the Euro vs. the US Dollar when considering the weekly candlestick formation. The monthly even looks better and more defined as the position for the next coming month for the fourth quarter would still continue. However, the opening of the new month would find some volatility that would hinder swing short term trades critical. Meaning, that to be able to successfully trade this market, one should bear the volatilty and account size as tolerance levels to remain in position would depend on the ability to define entry and exit points from wider price swings of the market.

Targets levels for the EURGBP cross would be prices much lower than what we currently are trading till the first week of October. The levels where it would meet some longer term support would be at the 0.8550/80 range unless any new incentives to perk the EURO higher says otherwise from hereunto.