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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 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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Time for a Reversal in Cable

The Pound has been one of the worst performing currencies this year. Hit by speculative shorts after Brexit, the GBP can't catch a break despite a series of surprising economic news. But the technicals may be pointing to a turn of the tide. On our first chart below we see two important signals.
First, the GBP/USD printed lows below 20 on the Stochastic Oscillator (oversold territory) and is now rallying back above it. This is a bullish signal. Two, we are seeing a bullish divergence between the …
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Brexit Support Will Not Hold

Cable has been relatively stable post-Brexit. The lows hit shortly after the event have yet to be broken. But the bears are not giving up yet! On our first chart below we can see that prices have made two attempts post-Brexit to crack the 1.2800 support. So far the level is holding but with each new test, the odds increase that we will see a break.
On our next chart below we can see that the long-term trend for GBP/USD has been down. We are currently quoted over 4,000 pips below the highs noted…
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More Losses for Cable

Cable lost over 230 pips in September. We opened the month at 1.5362 and look set to close near 1.5130. The chart below shows this downtrend clearly.
But I don't think the losses are done for the Pound. Yesterday and today we've cleared several important support levels, at 1.5170, 1.5162 and finally 1.5134. It wasn't an easy task, each move lower was aggressively bought up. But eventually we kept coming back down. With these levels now cleared, the road is open to the 1.4600 swing low. Right abo…
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