Nick Nasad
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EUR/GBP - Pair Close to Hitting Key Pivot in Daily Time-Frame

The EUR/GBP in the 4-hour chart is starting to test the resistance levels of its recent 2-week ranging action.

  • The implication is that if we break above the 0.85 handle that the pair maybe able to recapture some of the losses it suffered during August and September.
  • Since bottoming out the pair has seen a fair deal of consolidation, but with key event risk out of the way (US shutdown/debt ceiling and even the most recent NFP) the pair may decide to pick a direction.

  • We can see that the 0.85 handle is a key pivot as it was an area of support during the middle part of August, and therefore a break there would open up a move back towards 0.8575 and perhaps higher.
  • However if that resistance holds, and the macro data favors a return to GBP strength, then it presents a good risk to reward ratio for any shorts.

- Nick