The Best Trading Opportunity Today – EUR/GBP – November 27, 2015

Based on the current price action, the key market to watch today is the EUR/GBP. Currently, the GBP/USD is trading down 0.33%. The EUR/USD is down 0.18%.

The GBP/USD reached a low of 1.5030 earlier in the session. If the downside momentum continues then we expect the Forex pair to take out the November 6 bottom at 1.5026. This could lead to an acceleration to the downside if sell stops and fresh shorting pressure hits the market on the move.

The EUR/USD is also trading lower. Its intraday low is 1.0573, just slightly above the November 25 low at 1.0565.

The EUR/GBP is currently trading at .7035. The main trend is down. Its current short-term range is .6981 to .7079. Its 50% level or pivot is .7030. This price is currently controlling the short-term direction of the market. Holding above this pivot price could create enough upside momentum to challenge a long-term downtrending angle at .7046.

Taking out .7046 should fuel a fast rally into an uptrending angle at .7051. Overtaking this angle will put the EUR/GBP in a strong position. This could fuel an acceleration to the upside with the first target a minor top at .7079. This is followed closely by a major 50% level at .7088.

With the EUR/GBP building a support base since the November 18 bottom at .6981 we’re looking for an acceleration to the upside today.

The catalyst behind the rally could be a strong recovery by the Euro or a steep break by the British Pound. If there is a steep sell-off in the U.S. equity markets because of the weakness in the Chinese markets, we could see the Euro rally because of the carry trade. We saw a move like this in late August when a market crash in China led to a steep break in U.S. equities.

This is one reason why we believe that a breakout to the upside by the EUR/GBP is the trade of the day. It’s a counter-trend move and a momentum play, but the risk/reward of the trade is good especially if buyers can overcome .7051 with conviction.