Mondays euro zone PMI data saw the Feb support line tested. It held magnificently and the bounce has been quite strong, even for EUR/GBP.
EUR/GBP daily chart 05 12 2013
I mentioned on Monday that I liked the level for a short term long play but missed it first time around. I managed to get in on the second fall to 0.8260 and took profit at 0.8310. I don’t know entirely why the euro is so strong today given the data and the news and it seems we’re all scratching our heads somewhat. I just hope it lasts a bit longer so that I can start reloading shorts at 0.8400.
Cable’s having a bad day but still remains resilient so I may even start scaling into shorts around 0.8380 as we could see some resistance come in at the 26/27 Nov highs at 0.8385/90. The 200 h4 ma & 55 dma comes in just above 0.84 at 0.8406 & 0.8416 and we have a convergence of the 55 and 200 wma at 0.8457/60 giving strong resistance as well. The only caveat is that they are setting up for a famed “golden cross”.
