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EUR/GBP rose during the session on Monday and in fact shot straight up. The 0.80 level was tested for resistance, and it did hold in the end. However, the candle looks very strong and the GBP/USD pair looks like it is a bit vulnerable at this point time. This suggests to us that the British pound may be taking a bit of a breather, and this could translate to higher levels in this market. On a daily close above the 0.80 level, we are more than willing to go long for a 100 pip move.
The bottom of the candle sits right on a trend line that we have been forming over the last couple of months, so the fact that it rose during the session suggests that we are going to see a serious fight at this area. Remember, this pair does typically grind and not shoot straight up or down, so if you are involved, you will need to be relatively persistent. If we managed to break down below the lows from last week, and the 0.79 level, we would start selling hand over fist at that point.