EUR/GBP Impulse Wave Forex Trading Review – May 15, 2014

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EUR/GBP Impulse Wave Forex Trading Review - May 15, 2014

EUR/GBP Impulse Wave Forex Trading Review - May 15, 2014

EUR/GBP has been in a strong downtrend but the latest set of weak data from the UK has inspired a forex trading review corrective wave to take place. However, the falling trend line is still intact and might get tested sooner or later, allowing euro bears to reestablish their short positions at a better price.

As you can see on the 4-hour forex trading review chart, the 61.8% Fibonacci retracement level is closest in line to the falling trend line. This also happens to line up with the .8200 major psychological resistance level. A selloff from this point might last until the pair’s recent lows at .8150 or lead EUR/GBP to make new lows.

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EUR/GBP Forex Trading Review

A shallow retracement might only last until the 38.2% to 50% Fibonacci retracement levels if euro bears are eager to hop in. Take note that Germany, France, and Italy are set to print their preliminary GDP readings today and so is the overall euro region. Weaker than expected data could lead the forex trading review selloff to take place earlier than initially expected.

The UK jobs data and BOE inflation report turned out to be bearish for the pound, as the claimant count change was weaker than expected while the BOE shifted to a less hawkish rhetoric. After projecting that rates will increase before the UK general elections next year, Carney said that there’s still significant slack in the economy and that a rate hike isn’t likely in the near future. He also mentioned that other fiscal measures will be used to curb housing inflation instead of resorting to tighter monetary policy.

As for the ECB, many are waiting on the release of the 2016 inflation forecasts to see if easing is warranted or not. So far, the German central bank has urged the ECB to implement monetary policy easing, so a forex trading review of these currencies shows that the odds are tilted to the downside.

To contact the reporter of the story: Marco Roemer at marco@forexminute.com

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.