- The Euro has risen slightly against the British Pound during early trading on Thursday after the Bank of England has decided to hold still with its interest rates.
- That being said, this is a market that I think is stuck in a range. The bottom of the range is the 0.86 level.
- The top of the range is the 0.8750 level, and that is interesting in so much as we are basically right in the middle of that.
We do have a 50 day EMA at the 0.8642 level that is also rising. So that could offer a little bit of support as well. But ultimately, I think this is a market that is grinding higher, not taking off. Whether or not we can release enough inertia into the market to reach escape velocity from this range remains to be seen.
Short-Term Setups
But right now, I think you’re looking for short-term setups that offer back and forth opportunities. That is pretty typical for this pair because it does tend to be a very choppy one as there is a lot of cross border traffic. But also, this is a pair that I watch for triangulation. Triangulation is when you take two currencies and match them up against a third one. In this case, it would be the dollar.
So, this chart right here explains why the euro and the British pound are basically doing similarly against the US dollar. They’re in a state of stasis at the moment as we are just hanging in the middle of this range. Ultimately, though, if you see a huge move in one of these currencies against the other, generally speaking, it will be doing better against the US dollar than the currency it’s beating up on and of course, vice versa. So, while I don’t necessarily trade this pair a lot, I do watch this chart quite often. And right now, it tells me that the European currencies are in a good place. There isn’t a whole lot of volatility, but if we reach the outer portion of the range, then it might be something that becomes tradable.
Ready to trade our daily forecast and analysis? Here’s a list of some of the top forex brokers UK to check out.
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
