Let’s keep it simple. For the EURGBP:
- The high price in June reached 0.80326
- The high in August, reached 0.8034
- The high today reached 0.80358
- The 100 day moving average (blue line in the chart below) is at 0.8031 today.
The 1st test of these levels found sellers as risk was defined and limited against the 0.8031-35 area. The price has since corrected lower. The buyers are obviously stronger in trading today as the price gapped and remains well above the closing level and high price from Friday’s trading.
![EURGBP held resistance in trading today against old highs and the 100 day MA (blue line)](http://az705044.vo.msecnd.net/20140908/2014-09-08_11-27-15-650x369.png)
EURGBP held resistance in trading today against old highs and the 100 day MA (blue line)
Looking at the 5 minute chart below, the correction off of the high came down and through both the 100 and 200 hour moving average (blue and green line in the charts below). Note however that the move below the 200 hour moving average (green line) was short-lived and the price action has taken the price back up to test the 100 bar moving average. So the pair is currently trading above the 200 bar moving average below the 100 bar moving average on the topside. A break above the 100 hour moving average and I would expect another test of that key resistance above at the 0.8031 – 358 area.. Key level for the pair.
If the price can move above the 0.8031-36 area, the 0. 80737 level becomes the next target (38.2% retracement on the daily chart). Above that and a move toward the 50% of the same move lower at the 0.81358 is the next target. The 200 day MA at 0.8162 has not been broken since October 2013.
Obviously, the pair is getting a boost from the Scotland referendum. So event risk is great. When risk is great it is important to make sure you define and limit your risk and be aware that the market may gap on a headline or rumor here or there. With the 200 bar MA on the 5 minute chart holding for the most part today and the ceiling above, the technical levels can give comfort. Buyers – right now – remain in control but with an eye to get above the 100 bar MA for additional confirmation.
![EURGBP 5 minute chart is looking to base off the 200 bar MA and move back above the 100 bar MA (blue line)](http://az705044.vo.msecnd.net/20140908/2014-09-08_11-34-56-650x367.png)
EURGBP 5 minute chart is looking to base off the 200 bar MA and move back above the 100 bar MA (blue line)