When contracting price action occurs in the forex market expect an increase in price volatility and a much wider price fluctuation from a session to session basis. The start of the new trading month for May shows this typical example; where we can find that two contracting fundamentals between the Euro and the Sterling Pound is at play.
The price decline on the EURUSD currency pair came about with the European manufacturing data, a struggling sovereign debt crisis and the pressure building up on growth & unemployment weighed heavier that caused the EURUSD to drop to its current price levels of 1.3145 as of this writing. That triggered a softer EURUSD compared to Cable. Whereas UK housing data is high-lighted versus the European continent's weakened economic growth. Thus, prices on both currency pairs contracted in opposite directions. With the EURUSD sustaining a loss for the daily session, while the Sterling Pound maintains its trend higher as more trade analyst are convinced that it would take much more to drag the cable back to a bearish tone, the signals are there as of now.
The price decline on the EURUSD currency pair came about with the European manufacturing data, a struggling sovereign debt crisis and the pressure building up on growth & unemployment weighed heavier that caused the EURUSD to drop to its current price levels of 1.3145 as of this writing. That triggered a softer EURUSD compared to Cable. Whereas UK housing data is high-lighted versus the European continent's weakened economic growth. Thus, prices on both currency pairs contracted in opposite directions. With the EURUSD sustaining a loss for the daily session, while the Sterling Pound maintains its trend higher as more trade analyst are convinced that it would take much more to drag the cable back to a bearish tone, the signals are there as of now.
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