By FXEmpire.com
The EUR/GBP pair fell during the session on Tuesday, continuing the consolidation area just above the 0.82 level again. The area seems to be a bit of a floor in this pair, and as a result it continues to just “sit” in the immediate area.
The pair is an interesting one as the British and European economies as so interconnected. The Euro finds itself out of favor overall, and even on a day when it tried to rally against many other currencies, this pair was a straight shot down. While this is bearish for the Euro as a result, the pair still seems to be “stuck” in the 0.82 to 0.8250 area. This is often the action of a market that is trying to break down this market as we grind the lower levels away.
The session on Monday was a real attempt to break the 0.82 level down, and as a result we would sell heavily if we get a sub-0.82 level print on the daily close. The pair is decidedly bearish at the moment, and because of this we don’t like the idea of buying this pair. The 0.83 level above seems to be a spot where we could see resistance going forward, and this is a place where we would be more than happy to sell weakness as it had been so supportive before. (The classic technical analysis of “what was once support will become resistance”, etc.)
The pair doesn’t really give us a chance to buy at the moment, as there are simply far too many problems in the European Union to hold the currency. The market is so far beat down; we wouldn’t consider buying until we get a close above the 0.84 level, as it would show a real momentum shift in the markets.
As the two economies are so interconnected, it is quite possible that the action will be a grind overall, and as a result it is imperative that you remain patient with any trades you take. The selling of this pair on rallies and a sub-0.82 daily close are reasons enough for us to be selling and holding on.
EUR/GBP Forecast April 18, 2012, Technical Analysis
Originally posted here
