EURGBP in M30 & H1
We have seen earlier, a surprisingly robust Ifo report. German Ifo business confidence fell back slightly to 115.9 from 116.0 in the previous month. The drop back from the record high in July was less pronounced than feared and the breakdown showed a very encouraging jump in business expectations, which nearly compensated for the decline in the current conditions indicator. The breakdown showed sentiment improved both in both construction and manufacturing. Retail sentiment fell back in August, however, but could also have been impacted by weather conditions. All in all a better than expected report, which backs the Bundesbank’s view that the economy continued to expand at a brisk pace over the summer quarter. Bund futures extended losses on the back of the number, which together with the upside surprise in the PMIs will add to the arguments of the hawks at the ECB.
Therefore, despite the slight weakness of the EUR we have seen earlier today , on the anticipation of President Draghi speech today, but also on the inline German Q2 GDP this morning, German IFO pushed EURGBP back to 0.9200 area. However, this still does not indicate a bullish movement, since in an hourly chart, pair seems still weak, moving below 20 and 50 period MA and failing to break the intra-day trendline set at yesterday’s peak. Therefore I decided today, to traded on even shorter timeframes than usual. Hence after the last 30M candle which seems quite weak on the upwards movement, failing to break the 20-period MA and closing as Long legged Dogi candle, a Short position was taken in the 30M and 1H chart. The entry is at 0.9206, with 30M and Hourly Targets respectively, i.e. 0.9198 and 0.9174. Support level for 30M chart is at 50-period MA which is at 0.9213, while for the Hourly chart is at 0.9226. This position was taken only on the anticipation of Jackson hole and it is against the Daily Upwards trend of EURGBP.
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