Just a few weeks ago, EUR/GBP, one of the most popular Forex pairs, remained on a defensive front because of the volatile market. However, it has finally decided to test its 0.86 handle, which is a positive sign for many Forex traders. There is an enormous selling bias circulating the British pound. But it manages to hold its ground even during the weekend, proving that the EUR/GBP relationship is here to stand the test of time.
GBP over EUR
Those who are new to Forex trading should know one thumb rule: this industry works on currency pairs, and you should keep track of the highs and lows of different currencies during different periods. It is always better to understand the different terms used in Forex trading, such as candlestick analysis, capital management, trading journal, stop loss and target, and many more. Forex Academy, the largest online source for Forex trading news was the first to report about the testing of 0.86 handle
In one of the latest reports, the EUR/GBP pair was relatively volatile. Experts believe that it was the broad-based rally that took place in the greenback that put the Euro and the quid in severe downward pressure. This resulted in prompting the European cross to make sure that it sticks to its sideline bias so that it can maintain its position in the pair.
Emergence of Sterling
During the time the market was in turmoil because of the broad-based rally, Sterling continued to trade defensively. The EUR/GBP pair did not have any effect on Sterling, allowing it to maintain its dovish tone. According to experts, this situation is a result of MPCs 7-2 vote in favor of holding the rates at 0.75%. With Haskel and Saunders both supporting a 0.25 bps rate cut, it is easy to understand why Sterling remained on the defensive front.
Forex Academy earlier reported that the market will see a notable spark, especially with the upcoming UK general elections next month. The Conservative Party is leading the race this time, and with the debate between B. Johnson and J. Corbyn nearing, experts expected fruitful trades to take place. However, nothing as such happened. On the other hand, the German trade surplus recorded positively after the end of September. They had auspicious results both from imports and exports.
Key levels of EUR/GBP
The reports from this week show that the EUR/GBP cross is down by 0.05%. It finally touched 0.86 but breached the 0.85 mark, which was a monthly low on October 17th. Experts believe this is the best position that EUR/GBP reached in the last year. It reached a high of 0.89 during the period of May to August. It recorded 50% of its Fibo during this stage. Fortunately, the market recovered from a low of 0.84 in March.
Forex traders and analysts from Forex Academy are predicting that the market will rise after the general elections in the UK. So, newbie traders have to wait and see how they should proceed with their strategies in the next few days.