By: Mike Kulej
It seems that the bad news for the common currency stopped coming in. Or perhaps they are not big enough to move the markets any more. Whatever the case might be, the Euro has bounced off its lows, in a broad move, engulfing most of its pairs. This includes the EUR-GBP.
The Euro-Pound cross dropped over a thousand pips in last three months, reaching 0.8065, a rather large price swing for this pair. However, over the last week it advanced about 280 pips, creating an appearance of early stages of a reversal. The EUR-GBP is getting close to the most recent high of 0.8380, an important resistance at this stage. In addition, the price is approaching the bearish trendline. Breaking above either one of these lines, or both, would be a strong bullish sign. Another technical indicator worth watching here is the MACD, which produced a divergence recently. While still showing a negative reading, the daily MACD is getting close to the zero line. Should it climb above it that would be one more positive sign for the EUR-GBP. Next 1-2 weeks should decide if this pair remains in this strong downtrend or if it is ready to turn bullish.
