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EUR/GBP Returns to the Mean

The EUR/GBP is slowly returning to the mean. In August the pair dropped from a high of 0.9261 to close the month off at 0.8815. After the large gains during the past few months the pair is finally losing some ground.
But as can see on our next chart, the long-term trend on the weekly chart is still very bullish. These two conflicting trends as well as the congestion area the pair is in right now (see rectangle on chart one) should keep prices in range. Thus I'm betting on more range for the EUR/…
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EUR/GBP to Calm Down

The EUR/GBP continues its strong rally. In August the pair advanced by another near 200 pips move and is currently resting above the 0.9000 round figure.
But as you can see on the chart above, indicators are already flashing red. The weekly Stochastic Oscillator is printing values over 90, indicating a very overbought market. On our next chart below we see a similar situation on the monthly chart.
Here too the (5,3,3) Stochastic is printing values over 90. I also added 3 lines to indicate what h…
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EUR/GBP Overbought on Larger Timeframes

The EUR/GBP is overbought on the larger timeframes. The pair had a +600 pips rally since April of this year and +2,000 pips rally since the lows hit in 2015.
For a mostly range-bound pair this is too much. Technical indicators seem to confirm this view. The Stochastic Oscillator on the weekly hart is showing a value over 80, indicating overbought market sentiment.
Our final chart below shows that things aren't looking rosy for the bulls on the shorter-term charts either. Here we see the EUR/GBP …
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More of the Same in EUR/GBP

The EUR/GBP seems destined to continue in the path of mean reversion. Look at the daily chart below. After an initial bump to 0.9300 in October during the post-US-election chaos, prices fell back to the 0.8500 range. This is where we've been trading since around August of 2016.
On the second chart below we're seeing a similar picture on a lower timeframe. Here it's the 4 Hour chart that shows how during the last month (March) this currency pair exhibited a similar pattern. First we rallied stron…
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The EUR/GBP opened April at 0.8496, 10 pips above my forecasted price. During the month the pair traded to a high of 0.8590. From here we fell to a low of 0.8312, only to rally back higher. (see chart above).

The 278 odd pips of range is not a lot for one month of trading in a major currency pair. This underscores that apart from the direction, the volatility has been absent as well.

We are currently quoted at 0.8426, about 60 pips away from my target. Hopefully with some end of month luck I can get closer to my forecasted price of 0.8486.

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More of the Same for EUR/GBP

I expect more of the same in the EUR/GBP currency pair. In the past year Cable lost a lot of ground against the Euro, mainly due to Brexit. But as markets discount the event entirely, the pair has stabilized somewhat.
Look at the daily chart above. After an initial bump to 0.9300 in October, prices fell back to the 0.8500 range, where we've been trading since around August of 2016. The blue line on the chart above is the 100-day moving average.
Notice how price started to hug since November 2016…
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UPDATE 2:Time for a second update. Since my previous post the EUR/GBP traded in a very large range of 117 pips. This is a lot for two days of trading in this particular currency pair.

During this time a high of 0.8734 was hit, as well as a low of 0.8617. Nonetheless, ultimately the pair closed today at 0.8656, only 8 pips above the price noted in the update above.

With my target at 0.8541 I will need some Pound strength in the last few days of the contest to bring me closed to my target. Hopefully the official beginning of Brexit will provide some market clarity and allow for some GBP gains.

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UPDATE 3: The EUR/GBP is now quoted at 0.8565, only 21 pips away from my forecasted price of 0.8541.

Today we saw large losses in the Euro across the board and this translated into this pair as well. We opened the day at 0.8656 and steadily fell with only 1 green bar since the Europe open.

Eventually we closed the day near the current market price of 0.8565. Now a top position for my forecast looks doable as the pair is back to its range-bound movement. Wish me luck!

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UPDATE 4: Not good news to report in this update! The pair overshoot my target as the GBP strength continues across the board.

We are now quoted at 0.8492, exactly 49 pips away from my forecasted price at 0.8541. Still I have hope that we'll see the pair head back soon.

We've had 3 large red candles in this pair so far, this is unusual in a mean-reverting pair like the EUR/GBP. With only half a trading day left of the contest (on Monday) anything is possible!

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UPDATE 5: Time for another update and this time I have a chart! Let's take a look at how this month played out so far.

We opened at 0.8533 (shown by vertical line in the picture above. From here we rallied all the way to a high of 0.8786. This was followed by heavy selling that brought us back down to Earth.

This is typical behavior for mean-reverting pairs like the EUR/GBP. We closed on Friday at 0.8485, only 56 pips below my forecasted price!

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UPDATE 6: After closing near the lows on Friday, this Sunday morning we're seeing a general recovery in all EUR pairs. The gains are not large but they're sizable for this time of day, which tends to be a bit slower.

In the EUR/GBP we gapped open at 0.8469 and continued to slowly drift up to a high of 0.8508. We are currently quoted just slightly below these highs at 0.8505.

This is only 36 pips away from my forecasted price, meaning I have a real shot at a good prize position this month.

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EUR/GBP Bounces at Support

The EUR/GBP finally ended its post-Brexit slump by bouncing at the support area noted on the chart below. Price bottomed out at 0.8304 during December, just below the 0.8327 support and above the 0.8248 support level. With the downtrend over, I'm not willing to bet on major increases in this pair yet.
The reason why can be seen on the picture below. During December we moved between a high of 0.8304 and a high of 0.8666. This is a fairly small amount for a major currency. But what really paints t…
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The EUR/GBP opened the month at 0.8510 and is now quoted at 0.8579, not even 70 pips higher. The range-bound behavior this continues for a second month.

As we said in our original post, during December the pair had an open to close range that was at only 54 pips.

The current price is only 60 odd pips away from my target, so hopefully we'll get a small drift lower into month end.

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Cable Back in Oversold Territory

Cable is back in oversold territory. Let’s take a look at tour first chart below. Notice how on the daily chart the Stoch (5,3,3) dipped below the 20 figure. This is considered oversold in technical analysis. The climb back above the level confirms the ‘buy’ signal.
Our second chart below shows a similar oversold pattern but one that has run its course further then on the daily chart. Here the dip and climb back above the 20 level happened few bars ago.
I’m targeting 1.2781. This is right belo…
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EUR/GBP Enters a Cluster of Levels

The Pound is not having a good year. It's down against almost all majors and that includes the Euro as well. This pair initially rallied to a high of 0.9326 this year, over 2,000 pips above he lows hit in November of last year. But as we can see on the first chart below, that may be changing.
We're now quoted at 0.8468, almost 900 pips below the highs. Notice how the EUR/GBP is now entering a cluster of levels, both resistance and support. On the downside we have 0.8248 and 0.8335. On the upside…
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fxsurprise8 28 12月

I'm happy to report that the forecast is going according to plan! We are currently quoted at 0.8519, after having traded as high as 0.8571 and as low as 0.8300.

Both the current price and the monthly range are well within the bounds I outlined in my original forecast, support at 0.8248 and 0.8335, resistance at 0.8729 and 0.9326, among many other levels.

The pair has so far acted as i should, bouncing between these support/resistance levels. With the end of year coming up, which is usually a slow time for currencies, I don't expect major changes in market sentiment.

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fxsurprise8 31 12月

No major changes to report in this pair, currently we're trading at 0.8523 and that's where we closed 2016. We have a little bit more time to the January 2nd cut off point, so wish me luck!

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According to the charts, the EUR/GBP was quoted at 0.85174 on January 2nd at 12:00. This is 49.6 pips away from my forecasted price of 0.8468.

In percentage terms this is 0.58 percent price difference. This is not enough for the first place but hopefully I will land a position near the top.

I'm working on updating my charts from the original forecast. I will post them once I finish my work, later today.

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The picture above is an updated chart of my original forecast. The rectangle shows the price action for EUR/GBP during December.

Here's the scenario I forecasted. As the pair was  entering a cluster of levels, both resistance and support, I expected to see the pair bogged down inside these levels,producing a trading range during December.

As you can see on the pic, that's exactly what happened. We first bounced at 0.8304, between the support levels at 0.8248 and 0.8335.

The pair then rallied to near the resistance at 0.8729 but was rejected and proceeded to fall back down toward my target.

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Pound to Head Toward 1.3000

It’s been a rough two-and-half years for the Pound. The pair lost over 5,000 pips from its highs back in July 2014. But even during the middle of that carnage we had some ‘dead cat’ bounces. On our first chart below notice how we get these small rallies whenever the Stochastic Oscillator dips below 20 and then recovers and heads higher.
With hindsight these small uptrends may not seem like much on first glance, keep in mind that this is a monthly chart. The duration of one TA contest cycle enco…
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Elens94 avatar
Elens94 1 12月

Excellent stuff !

TInna avatar
TInna 1 12月

well done!

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EUR/GBP Stalls at Resistance Levels

The long-term trend in the EUR/GBP is undoubtedly up, prompted by the weaker Pound and exacerbated by Brexit. But the rally is hitting against some serious road-block in the face of several multi-year resistance levels. First we have the 2011 high at 0.9086. This is followed by the 2009 high at 0.9407 and finally we have the 2008 high at 0.9804.
During the past few weeks the pair topped out just below this second one of the resistance levels above and is now heading down. Take a look at the shor…
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