Forex: EUR/GBP falls to test 0.8600 after frantic burst of activity

on Aug 7, 2013
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_iNVEZZ.com Wednesday August 7th_: The EUR/GBP yesterday put on 0.39 percent, after opening at 0.8632 and closing just one pip shy of the day’s high at 0.8672. The low for the day at 0.8617 was also an eight-day bottom.

In sluggish Asian trading today, the price ambled within a shallow 12-pip range of 0.8668 to 0.8680. So it continued until 10.30 BST, well into the European session, when volatility became the order of the day. From a sleepy 0.8678 the price rocketed to 0.8729 (intraday high), before turning sharply due south and hurtling to 0.8583 (intraday low). Things have calmed down during the past hour, with the pair currently trading at 0.8607.

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Since yesterday the 200-hour simple moving average has been acting as a resistance, hindering the pair in its endeavours to rise above this trend indicator. Today the 89-hour SMA joined the resistance movement and crossed below the 200-hour SMA. During the aforementioned pip frenzy a one-hour candle spiked above, but subsequently closed below, the two trend indicators.

On the 4H chart, the two SMAs are also crossed and the price may decline further to trade below the key 0.8600 level. Should that level hold though, the pair could be expected to rally, expanding the uptrend from the 26 April low of 0.8396.
Resistance levels today: 0.8640, 0.8680 and 0.8730.
Support levels: 0.8585, 0.8560 and 0.8520.
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EUR Forex