Euro Gains Versus US Dollar, But Falls to Key Support Against the British Pound

The euro and British pound both rallied against the ultra-weak US dollar on Thursday, but there really wasn’t anything in the way of economic news to warrant the buying of the European currencies. If anything, investor sentiment was responsible for many of the moves in the FX markets, and with the British pound being traded as a “risky” asset, the currency proved to be stronger than the euro. In fact, the decline in EUR/GBP took the pair down to key support at 0.8500, which is both a psychologically important level as well as the 61.8 percent fib of the late 2008 rally. However, a break lower leaves the door open to more significant declines toward the December 2008 low of 0.8233 and former congestion near 0.8145/50.

[B]Related Article: Euro Weekly Trading Forecast, British Pound Weekly Trading Forecast[/B]