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Home ANALYSIS

EURGBP continues retracement of the move up last week

A.R Chowdhury by A.R Chowdhury
April 4, 2022
Reading Time: 4 mins read
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EURGBP

EURGBP runs lower today.

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The  EURGBP 
EUR/GBP

The EUR/GBP is the currency pair encompassing the European Union’s single currency, the euro (symbol €, code EUR), and the British pound of the United Kingdom (symbol £, code GBP). The pair’s rate indicates how many British pounds are needed in order to purchase one euro. For example, when the EUR/GBP is trading at 0.7500, it means 1 euro is equivalent to 0.75 British pounds.  The euro is the world’s second most traded currency, whilst the British Pound (GBP) is the world’s third most traded currency, resulting in a comparatively liquid trading pair. While the spreads of currency pairs vary from broker to broker, the EUR/GBP often stays within the 1 pip to 3 pip spread range.This may make it seem like a decent candidate for scalping, although its low range can be a hindering factor, similar to the EUR/CHF. What Makes the EUR/GBP Unique?As mentioned, EUR/GBP is seen as a viable pair for scalping, due to its relatively predictable price action, and low stable spread. Intraday trading the EUR/GBP however does generally require more patience compared to other pairs.From a technical standpoint, it follows that as EUR/USD and GBP/USD are positively correlated, EUR/GBP’s volatility is going to be less than the two aforementioned majors’. Perhaps more so than any other, this currency pair has been continually affected by ongoing Brexit discussions in the UK. Presently, there is no consensus on how the situation will be resolved, something that has influenced the EUR/GBP and will do so until a resolution is agreed upon.

The EUR/GBP is the currency pair encompassing the European Union’s single currency, the euro (symbol €, code EUR), and the British pound of the United Kingdom (symbol £, code GBP). The pair’s rate indicates how many British pounds are needed in order to purchase one euro. For example, when the EUR/GBP is trading at 0.7500, it means 1 euro is equivalent to 0.75 British pounds.  The euro is the world’s second most traded currency, whilst the British Pound (GBP) is the world’s third most traded currency, resulting in a comparatively liquid trading pair. While the spreads of currency pairs vary from broker to broker, the EUR/GBP often stays within the 1 pip to 3 pip spread range.This may make it seem like a decent candidate for scalping, although its low range can be a hindering factor, similar to the EUR/CHF. What Makes the EUR/GBP Unique?As mentioned, EUR/GBP is seen as a viable pair for scalping, due to its relatively predictable price action, and low stable spread. Intraday trading the EUR/GBP however does generally require more patience compared to other pairs.From a technical standpoint, it follows that as EUR/USD and GBP/USD are positively correlated, EUR/GBP’s volatility is going to be less than the two aforementioned majors’. Perhaps more so than any other, this currency pair has been continually affected by ongoing Brexit discussions in the UK. Presently, there is no consensus on how the situation will be resolved, something that has influenced the EUR/GBP and will do so until a resolution is agreed upon.
Read this Term
is following the EURUSD’s move lower today and in the process has shifted the bias back to the downside.

Recall from last week, the price low on March 28 was at 0.8321 but by the end of the day, had moved above the 100 hour MA, and the 200 hour MA.

That upside momentum was continued on Tuesday. The price high was reached on Thursday at 0.85118.

Since then a reversal lower has seen the price move back below the rising 100 hour MA on Thursday. The high on Friday retested that 100 hour MA before moving lower again today.

The price action today saw the price move below the 100 day MA at 0.8499 and the 200 hour MA near the same level. With the natural 0.8400 level at that level too, it now represents a risk level for shorts. The new low for the day was just reached at 0.83607.

The pair is still off the low from a week ago at 0.8321, but a good chunk of the move higher last week, has been retraced.

What next?

Watch the 61.8% at 0.8377 as close risk. A stronger resistance for sellers looking for more downside would come in at 0.8400 area. Seller would not want to see those levels breached on a corrective move higher.

On the downside, fall below 0.83588 and the door opens for 0.8338 and 0.8321 (last Monday’s low) ahead of the low from March 23 at 0.8295.

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A.R Chowdhury

A.R Chowdhury

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