EURGBP and Interesting Possibilities

For me, the most interesting chart today is that of EURGBP. This is due to a couple of reasons. First reason is that both euro and the pound have huge news events today and so it is safer to stay out of them till we know the correct direction. Secondly, understanding what EURGBP would be doing would give us clues on the future direction of euro and the pound. Using these clues, we can then analyse euro and the pound and try to co-relate them. I love working thru co-relations.

Attached is the chart for eurgbp. From what i see, i believe that yesterdays upmove somehow doesnt look right to me. It stopped at strong resistance at around 0.8800 and is yet to show any attempt higher. I believe that this may just be an upmove to force the shorts to buy and cover so that the big boys can then take it down. So, for me, until this pair is below 0.8800, this looks good for shorting. Break above 0.8800 should lead to further gains. I will be looking to sell as close to 0.8800 with SL just above 0.8800. This trade is supported by the volume as well. Lets see.

So the above scenario indicates euro weakness or pound strength or a combination of both. So, maybe the BOE might raise rates or the ECB may not raise rates or may raise only 0.25% which the market may not be happy about and hence might drop the euro...A very interesting scenario. Lets see what happens. As always, i can afford for my analysis to be wrong but not my trade. So, trade with strict and tight stop losses and ensure that you only enter at the price that you want and not the price that the market wants you to enter in...

Trade Safe !!