Partner Center Find a Broker

Asian session traders took cues from their U.S. and London session counterparts and dragged the U.S. dollar lower in favor of its higher-yielding counterparts.

Will the risk-taking theme extend today? I’m looking at two European currencies for a possible trade setup.

Before we talk about EUR/GBP though, you should take a look at the top headlines during the Asian session:

Major Forex Pairs Price Performance from MarketMilk
Major Forex Pairs Price Performance from MarketMilk

Upcoming Potential Catalysts on the Economic Calendar:

  • Germany’s preliminary CPI due in a few hours
  • Spain’s flash CPI at 7:00 am GMT
  • U.K.’s mortgage approvals at 8:30 am GMT
  • U.K.’s net individual lending at 8:30 am GMT

What to Watch: EUR/GBP

EUR/GBP 1-hour Forex Chart
EUR/GBP 1-hour Forex Chart

EUR/GBP started trading lower since mid-September and it doesn’t look like the bears will give up their momentum just yet.

We know from the past trading sessions that negotiators from both the U.K. and EU as well as market players are cautiously optimistic that a Brexit deal could be reached this week.

Meanwhile, the major EU economies are dealing with a second wave of infections that could inspire lockdown policies. What’s more, Lagarde and her ECB gang seem divided on how to deal with the current and future impact of COVID-19 infections.

EUR/GBP is now lollygagging around the .9080 levels, which lines up with a 38.2% – 50% Fib move of the September 25 – 28 downswing.

With an average volatility of 66 pips to keep in mind, euro bears can aim for yesterday’s lows if they believe that EUR/GBP will extend its downtrend from its current prices.

For the bulls, you can wait for today’s German CPI and U.K.’s mortgage approvals and individual lending to see if they can push EUR/GBP back to the channel resistance.