EURGBP – Let The Rally Begin

Last week, we analyzed EURUSD and AUDUSD. EURUSD reached 1.40 as we predicted and AUDUSD is still waiting to make its move, which I am confident will get there sooner or later.

This week we will look at EURGBP, both technically and fundamentally.

EURGBP Technical Analysis

On weekly chart EURGBP clearly broke out of trendline, this was part of triangle formed by two converging trendline. Price moved up and down several time within this triangle before breaking out to the top. Now, with the trendline broken price is looking to move higher.

EURGBP Daily chart (captured on Monday) shows price broke above and re-tested the trendline last Friday. Re-test of any trendline, support and resistance confirms the direction of the breakout and in this case it can’t get any better. Since the re-test price has already moved up and looking to head higher.

EURGBP Fundamental Analysis

Last week, ECB President Jean-Claude Trichet made headlines after his hawkish comments signaled a likely rate rise in next month announcement. If that happens EUR is likely to gain significant strength since it has been quite a while since any major country has raised rates.

Later this week we have Bank rate announcement from GBP, keep an eye on that.

EURGBP Trading Plan

Look for longs on dips on shorter timeframe until 0.8670 area which is the next Resistance level. If price breaks this level then it is likely to move all the way up to 0.8920-30

If for some reason price is unable to move up and fall back below the trendline then it could signal further downtrend.

Don’t just read, participate by leaving a comment below

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7 Responses to “EURGBP – Let The Rally Begin”

  1. Mk G 8 March 2011 at 2:29 pm #

    Good work FP! Waiting on EURUSD analysis for this week.


    • FirePips 8 March 2011 at 4:31 pm #

      Hi MK,

      Thanks mate. I'll try to post EURUSD soon.

  2. hamid 8 March 2011 at 7:09 pm #

    Good analyse,

    SO,How do you get a position here?

    • FirePips 11 March 2011 at 9:52 pm #

      You can any strategy as long as you align yourself with analysis from higher timeframe then it will all work out. We use CandleTick strategy to enter trades.

  3. javy 8 March 2011 at 10:37 pm #

    Hi FP, very good analysis. Thanks, I agree with you, EUR/GBP is well supported after it broke a 60high EMA back in February 23. We have been long on that position since 0,8470 with a profit target area of 0,8604. Can I ask you, what strategy you are following, do you consider yourself more technical or fundamental or a mix?

    • FirePips 11 March 2011 at 9:55 pm #

      I am more technical than fundamental type. But I keep an eye on news at all times. I think it is very important to know what news is moving the market at given point of time and how long the momentum will last.

      All members in Live Trading Room now can see live news feed from

  4. Magrit 11 March 2011 at 9:55 am #

    Arrived at your web site through Google. You already know I am subscribing to your rss.

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