Weekly FX Review - 10 November
All eyes today will be on the US inflation data which could cause significant moves. So, while we wait for that we will take a look this week at the EUR/GBP cross. The monthly chart shows how price action gained sharply from 2015 to 2017, only then to retrace to 50% of this move on a couple of occasions, most recently back in early 2022.
Over this long term view the price action remains positive while this 50% holds, and especially while the 61.8% area holds at 0.855
On the weekly chart it is possible to put up Fibonacci retracement levels on the price action above the 50% monthly chart. Over this timescale we can see how price action has been able to work its way back towards the 50% area in recent weeks, only to fail, and now appears to be struggling to decisively break the 38.2% area.
Suggesting that the buying momentum from the last move to 0.824 has already started to lose some momentum. Can it return?
The daily chart shows this recent move higher in more detail. The spike up towards 0.93 occurred in the period of extreme volatility on the British pound around the mini-budget when it fell to near parity against the dollar.
Price action here quickly retraced from these extremes and the medium-term positive trend remained intact. Daily price action could now ease down towards 0.8600 and still remain in a positive near-term trend. So, while price could slip towards this area on any future volatility ahead, the long-term positive trend, the medium-term trading range, and the daily positive trend would seem to be giving positive momentum to the buyers. With moves down under 0.8500 seen as likely before this optimism may start to lose sway.