The Euro was seen trading lower against the British pound recently. However, the EURGBP pair is still in the bullish zone on the higher timeframes, which means we can look to buy the pair once it corrects or dips more from the current levels. There is a major support on the way down for the pair, which might act as a catalyst in the near term.
The EURGBP pair is currently trading near the 38.2% fib retracement level of the last leg from the 0.7800 area. There is a chance that the pair might dip from the current levels and towards the 50% fib retracement level. In that situation, if the pair forms a bullish divergence, then we can enter into a buy trade. Remember, the pair has to stay above the 0.7860 support area for this trade setup to remain valid.
Initial target should be around the 0.8020 level, and final target could be around the 0.8080 level. Stop should be placed below the 0.7860 level.
Reviewing recent events and trades
Yesterday, there were a couple of important releases lined up in the Euro zone as well as in the US. The main one in the Euro zone was the manufacturing and services PMI, which came below the expectation and registered a reading of 50.4. The main event in the US was the consumer price index, which came better than expected. However, the market sentiment was not seen favoring the US dollar as it traded lower against a few major currencies.
Fundamental Outlook for the day
Today, there is no major release in the US during the NY session. However, the Canadian consumer price index data is lined up which might create some volatility in the Canadian pairs. The best one to watch will be the USDCAD pair. The market is expecting a minor improvement this time, which if turns out true might ignite swing moves in the USDCAD pair. Today is Friday, and that is the reason why we will avoid opening any risk trades in the short term.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: GBPUSD, GBPCHF, AUDCAD, USDCAD, USDJPY, CADJPY, AUDJPY and NZDUSD.
Get it HERE: Vladimir’s Markets Forecast
Trade carefully friends. Happy trading!
