EUR/GBP Forex Signal Today 02/08: Building A Base (Chart)

(MENAFN- Daily Forex) Potential signal:

• I am a buyer of this pair right here, right now.
• I have a stop loss at the 0.8375 level, and I have a target of 0.8750 for a longer term trade.

In my daily analysis of the EUR/GBP pair , I can see that this asset is in the midst of trying to form some type of basing pattern. At this point, the market looks as if it is trying to turn things around, and that does make a certain amount of sense considering that the 0.84 level is an area that has been important multiple times on the longer-term charts, and although we have seen a bit of resistance every time we have rallied, I do think that is probably only a matter of time before we do break out Floor Below

The 0.84 level has been a major area of support multiple times going back multiple years and can even be seen on the monthly chart. It is because of this that I am watching this pair very closely, because we may have a massive swing trade ready to happen. If we were to break down below the 0.84 level for a sustained move to the downside, that would be a very negative turn of events for the euro. I don't think that happens, but it is something that you need to be cognizant of.

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This has been held by the Bank of England cutting rates during the session, and that of course has people think of perhaps the Bank of England could go on a rate cutting spree. Whether or not that ends up being the case remains a bit of a question, but at this point I think you've got a situation where traders are just simply finding this area to be full of“cheap euros.” Beyond that, the British pound has gotten a little overstretched, so a lot of this action does make a certain amount of sense. That being said, keep in mind this is a pair that moves very slowly, and therefore you can't be looking for a big move right away. In other words, you could have a situation where the market is going to offer a swing trade that may take multiple months to get beyond resistance and start taking profit.

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