 Good morning and welcome to the chart of the week video with me David Madden The day's date is Friday the 11th of September 2020 and the time has just gone 915 British summer time and this week's chart of the week is Euro sterling Now if you take a look at the price action of the last few months We can see that your sterling has been broadly speaking has been a nice upward trend and the last few and that's the last week or so it's certainly It's really kind of pushed higher on the back over uncertainty in relation to what the future relationship between the UK and the European Union is going to look like About less than a week ago. We are from the British Prime Minister Boris Johnson He basically said if the UK hasn't Negotiated a kind of comprehensive free trade agreement with the European Union by mid-october. It'll be time to walk away from the negotiating table More recently refer from the European Union who essentially said if the UK doesn't back down By the end of the month It kind of it looks as if it's kind of kind of a effect to be paving the way for a no trade no trade agreement situation Come January 2021 So the the fear and uncertainty that trading between the UK and the European Union will be done on WTO WTO terms come early January 2021 Has really put pressure on the British pound and therefore the euro has pushed higher some it was only yesterday The euro at its highest level against the British pound since March of this year So it's in a solid upward trend and the this video is going to discuss where could we potentially go from here? So the markets in an upward trend We're seeing a solid increase in positive momentum So the upper trend remain you know the the bias is clearly towards the upside but to be fair when you when you see a Growth rate like this That seems a bit unsustainable at that particular level So the trend is very much to the upside But you know, we could see a bit of a pullback before we potentially see a continuation of the positive move So if we take a look an hourly chart, we can get a better view of the of the price action We can see here. This are really things have ratcheted up in the past 24 hours So if you take a look at this price chart this chart here We can see that this blue line here at the 50 hour moving average has acted nicely as support on a few occasions In you know in the last couple of weeks So what we could see given that the moves you see in the upside in euro starting having quite aggressive We could see a bit of a pullback Potentially towards the zero spot 92 area or even back even potentially back towards this zone here the 50 50 hour moving average In a zero spot 91 49 Before we before potentially the wider upward trend continues. Now if you take a look at this area here zero spot 91 49 it's not too far away from this area where we saw a bit of consolidation ever so slightly in that zone there in around Zero spot 91 38 and then also keep mind this area active as resistance A couple of days ago. Once again, that's in around the zero spot 91 30 reading. So this entire area Could act as a support should you move lower and even potentially down toward this kind of zone between zero spot 91 and down to zero spot 97 so keeping out on those areas for Areas of potential support should you move lower? To the upside work. We potentially go from here. I Am we have to go back to merge to see can areas of potential resistance? We saw a lot of volatility in the month of March, but the high Of could have mid to late March in a zero spot 93 88 could active resistance There is up towards zero spot 94. So keep an eye on these areas to the upside As potential areas of resistance and if you go beyond that and the highs of of March will then become into play in around a zero spot 9504 sorry zero spot 9509 and then if you go beyond that, we were looking up towards zero spot 96 Well, we've talked about how the weakness in the in the British pound versus the Euro if you take a look upon sterling a different Chart we can see that the weakness in the British pound isn't just confined to against the Euro It's also it's also losing ground versus the US dollar only yesterday pound dollar dropped to its lowest level since the late July. So While you're talking about why am I mentioning this? Well, if you look at Dow theory one of the talents of Dow theory is that the averages must confirm each other And what that basically means is that markets that are similar Are likely to be likely to be moving in a similar direction So we can see that this weakness in the British pound versus the Euro Euro sterling is moving higher But we can also see that this weakness in the British pound versus the US dollar Or we saw just a moment ago that dollar that pound dollar dropped to its lowest level since late July That's it in this video. Thank you for listening. Have a good trading week and good luck