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Session crossovers, particularly in the transition from the Far East and Asia into the European and London session, are always a happy hunting ground for the insiders and market makers, and this morning was no different, with some excellent examples across several pairs. One in particular was on the EUR/GBP on the 30 minute timeframe with the volatility indicator duly triggered on the deep hammer candle and signalling a likely snap back, which was also mirrored with a two bar reversal on the 15 minute chart. For volume traders, the message here was clear as insiders moved in to buy and duly take the pair higher, and firmly through the volume point of control (the yellow line) before going on to test the high of the session at 0.8880.
Weakness in the British pound was further reinforced with weak fundamental news as construction PMI data came in well below forecast and falling below the fulcrum point of 50, at 48.1. And the technical picture for the pair was very neatly encapsulated on our Quantum currency strength indicator with the yellow line (British pound) falling deeper and towards the oversold region on the indicator, while the euro, the orange line, moving strongly into overbought and continuing to remain bullish.
