The Euro v/s British Pound Franc pair of currency is a slow moving trends currency pair. Since its beginning, Euro’s destiny has been tied up to the British the economies are equally tied up because of geographic nearness and have an exceptional trade relation. This fundamental aspect has assisted to grow Euro zone that can be seen in the increased of the EURGBP currency pair moving to 4117 pips 9805 pips from 2000 to 2007.
In 2000, the ascending position of the EURGBP started with 4117 pips with the beginning of the Euro. During the ascending period, the EURGBP had been less volatile than other Euro currency pairs. On average its moves has been 50 pips per day half of the action of the EURUSD currency pair. It is essential to note that levels of ATR increased during the financial crisis in 2008 to a 230 record level and then rapidly declined to 50 levels. Since the ATR had decreased to its normal levels, so the EURGBP decreased 19 percent to its 2008 peak level. It is challenging to make a new trend, Let us examine the main fundamental drivers of the currency pair EURGBP.
European Debt Crisis
The current decline in the currency pair EURGBP has moved to the back because of the current European debt crisis. Its growth has slowed down in the zone of the Euro on the rumors about the banks collapsing, political changes and social unrest.
European investors and businesses have jumpy. They are looking to their neighbors across the channels to bring their money as the crisis of the continental plays out. In a result, an explosion in Great British Pounds demand has seen .This has shifted the EURGBP in the longest bearish trend in its survival, decreasing to 1800 pips just in the last 3 years. Moreover, if this economic risk continues in Europe, then, it might spell a change on this currency pair in the long trend.
Trading the EURGBP
The trading of currency pairs EURGBP is an outstanding proposition for the traders of trend who prefer to stay away from the EURJPY pairs and traditional EURUS’ volatility. To know about the long lasting trends, this is very important to identify support levels as well as resistance levels for successfully trading the EURGBP.
Recently resistance level has been established through connecting 2008:2011 peak level at 9084 and support level is established through connecting Feb 2009 low level at 9663 to low level of June 2009 at 8399. The both support level and resistance level are running parallel toward the descending course, indicating a bear price channel.
The traders would look to take benefit of the increasing channel by buying support and selling resistance. MACD or RSI could be employed to guess market timing for making new entry positions and for momentum. The breakout traders can also utilize the channel of pricing for looking a breakout of the resistance level and a back to the long standing uptrends.
Regardless of the traded method, if you keep an eye on those levels, they would help you smart traders navigate the EURGBP betterly.
EUR/GBP is currently around 0.8.