Follows the stocks too...

The EURGBP has been trending higher over the last few days. As stocks go lower, the Pavlovian reaction seems to be buy EURUSD, sell GBPUSD which translates into buying the EURGBP. If stocks go higher, the reverse happens.

So when S&P was up 22 points in pre-market trading the EURGBP was under pressure. That took the price to the 100 hour MA (blue line in the chart above)and the 38.2% retracement at the 0.7726-31 area. Stop right there. Traders cannot ignore that combo as risk is defined and limited. Yellen comments. Stock drift lower (S&P up 12 now) and EURGBP rallies.

Now what?

Well technically, looking at the 5 minute chart, the price has gone up to test another 100 and 38.2% combo. This is from the 100 bar MA on that chart and the 38.2% of the move down at the 0.7762-64 area. Market stalls.

We could trade EURGBP by trading stocks or simply follow levels in the EURGBP chart. I would prefer leaning against levels and see what happens. The smart traders know the winds of the stock market can go anywhere. Why mess with it when you can have your bias, lean against a tech level and if you are not taken out, you have a winner.