Technical Bias: Bearish
- Euro climbed against the British Pound, but facing a monster resistance around 0.7060.
- German Trade Balance data published by the Statistisches Bundesamt Deutschland posted a trade surplus of €24B in June 2015, compared with the forecast of €21.5B.
- German Industrial Production was also lined up today, which registered a fall of 1.4% in June 2015, compared with the market expectation of a 0.4% gain.
- EURGBP could move lower once again if sellers gain control and buyers stepped aside.
The Euro showed a lot of positive bullish signs during the past couple of sessions, as it traded higher against the British Pound. There is a resistance trend line formed on the hourly chart of the EURGBP pair, which acted as a barrier and prevented upsides. One key point to note here is that the pair managed to close above the 200 hourly simple moving average, which is a positive sign, but suggests convergence with the trend line.
Currently, the pair is trading near the 23.6% Fib retracement level of the last wave from the 0.6951 low to 0.7063 high. Moreover, the 200 SMA is also sitting around the same fib level, suggesting that the pair could trade higher moving ahead.
We need to see whether buyers succeed in breaking the trend line resistance area or not. If there is a break, then the next stop for buyers could be around the last swing high of 0.7100.
On the downside, the 200 SMA holds the key for more losses.
German Trade Balance
Earlier today, the German Trade Balance, which helps in calculating the balance between exports and imports of total goods and services was published by the Statistisches Bundesamt Deutschland. The market was expecting a trade surplus of €21.5B in June 2015, compared to the preceding month. However, the outcome was higher, as the German Trade Balance came in at €24B.
Buying with a break above the trend line might be a good option.