FMFX

EURGBP New Week Outlook August 14 2011

The EURGBP also saw some wild moves last week as the market had to deal with the fact that now France as entered the European sovereign debt crisis discussion at the same time that Italy has become a serious concern in the market. Technically, however, the pair gave mixed signals as price made lows at 0.8640 rallied over 200 pips to 0.8880 and ended the week at 0.8750.

The lows on Friday at 0.8730 gave a very small signal that EURGBP will head lower by piercing even the 78.6% Fibonacci level. Also, price closed the week below 0.8750 even if by only a few pips (0.8748 on my platform). Rallies to the 0.8880 highs continue to be met by sellers to target the green buy zone below 0.8700. However, the week closed before entering this green zone. Therefore, this pair continues to maintain is bearish bias into the 0.8600’s. Only a break and hold above 0.8880 changes this bias to bullish.