Euro Remains Bearish against British Pound, Selling Preferred (extract from Weekly Market Forecast 21st of September 2014)

The Euro dived during this past week against the British pound, and traded below the 0.7850 level. The Euro sellers are looking unstoppable at the moment, especially against the British pound. I think the EURGBP pair might continue trading lower once it completes a short-term correction. So, we should be looking for sell opportunities moving ahead.

There was a critical bullish trend line on the daily chart of the EURGBP pair, which was broken during this past week. There was a major support as well around the 0.7925 area, which might act as a resistance in the short term. So, if the pair corrects a bit higher from the current levels, moves closer to the mentioned resistance area, makes a stop and forms a bearish divergence, then we can jump into a sell trade.

Initial target should be around the 0.7840 level, and final target could be around the 0.7800 level. Stop should be placed above the highlighted trend line and resistance area.

Major events scheduled in the upcoming week
The Scottish Independence issue is now over, and the market possibly avoided a very volatile situation. The votes were in favor of No to the independence, which ignited a bull wave in the GBPUSD pair. The pair traded above the 1.6500 level, but later dived to trade below the 1.6400 level. The US dollar performed well against the Euro and the Japanese yen during this past week, as the Fed was a bit more optimistic in the statement. The EURUSD pair closed the week around the 1.2800 level and the USDJPY pair closed around the 109.00 level. There is a strong chance of the EURUSD pair trading below the 1.2780 level in the upcoming week.

Let us look at all major events lined up in the upcoming week.
Sunday – Australia’s Westpac consumer sentiment.

Monday – US existing home sales and Chinese HSBC manufacturing PMI.

Tuesday – French manufacturing PMI, Spanish manufacturing PMI, German manufacturing PMI, Euro zone manufacturing PMI, Canadian retail sales and New Zealand trade balance data.

Wednesday –German IFO business climate index and US new home sales data.

Thursday – US core durable goods orders, US initial jobless claims and Tokyo CPI.

Friday –German GFK consumer climate, US GDP and Michigan consumer sentiment.

This analysis is taken from Weekly Market Forecast, which also includes trade opportunities on: GBPCHF, EURGBP, USDJPY, EURJPY, GBPJPY, AUDUSD, NZDUSD, AUDNZD, EURAUD, USDCAD and AUDCAD.
Get it HERE: Vladimir’s Markets Forecast

Happy trading friends!

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