Since opening session on Tuesday the index Stoxx Europe 600 has dropped by 0.2%, and at the same time German DAX fell by 0.3%, which is the decline over 10% since mid-April. Later, favourable data on the British trade balance for April became known and GDP of Eurozone in Q1. No more British or European news is scheduled for release today; therefore movement in the pair will depend on the movement of the Pound and Euro against the USD.
It is necessary to be very careful when opening long positions on the pair, as the rise in the pair can stop. Until recently, the Euro in the pair EUR/GBP was supported by several factors. Despite Greek problems Euro was actively bought in the cross-pair with other currencies and amid the growing yield of the 10-year German bonds.
Support and resistance
Following the decline from the level of 0.8810 in the summer 2013, the pair EUR/GBP has stabilized and since mid-March 2015 is moving in the channel of 0.7055–0.7400
On the daily chart the rise in the pair is prevented by the resistance levels of 0.7525 (ЕМА200), 0.7470 (Fibonacci 23.6%) and 0.7425 (ЕМА144). At the moment the pair is at the level of 0.7370 not far from the above resistance levels. On the daily and four-hour charts the indicators OsMA and Stochastic are in the buy zone; Stochastic is giving a sell signal.
Support levels: 0.7245, 0.7155 and 0.7055
Resistance levels: 0.7400, 0.7425, 0.7470 and 0.7525
It is recommended to open short positions at the market order and from the levels of 0.7400 and 0.7425 with the targets of 0.7270, 0.7245 and 07155. Alternative scenario is possible if the price breaks down the level of 0.7470 with the targets of 0.7525 and 0.7570.