Hello and welcome back to Cantos Charts. I'm David Jones from spread betting company IG Index and continuing the theme of trends, we're going to wrap things up today by looking at what I think is a really interesting market to watch over the next couple of weeks because we have got some conflicting trends.

So what we're looking at here is currency pair EUR/GBP and I'm starting off with the big picture view, or fairly big picture view anyway, going back the last 12 months or so for EUR/GBP.

Now a year ago a euro was worth about 94p and then by July this year it was only worth about 81p, so we've seen a fairly consistent slide in the euro against a currency such as the pound here and of course, the US dollar and many others, because of the sovereign debt worries that we saw starting to break the first/second quarter of this year. But we're seeing something of a resurgence by the euro again against the US dollar and sterling in recent weeks or so.

So it has given us an interesting set up because Technical Analysts will look at things like trend lines and they'll use trend lines as a form of sloping support or resistance. The strength that we've seen in the euro since the beginning of September, so only over the last month or so, we've seen the euro rally around about 500 points against sterling and it has brought it back to this trend line and low and behold, so far, it has backed away from this level. So it's sitting around about the 87.50 mark.

So we've broken some big levels on the way up because historically, over the last 12 months, we've seen rallies for the euro but they have run out of steam ultimately ahead of previous major resistance levels. But this one managed to break through these July highs up around about the 85.50 mark and again, for those of you who are a fan of double bottoms (I'm not a big fan of patterns) but we had potentially a double bottom in EUR/GBP over the last few months and this break to 85.50.

So we had a great run over the last few weeks but we've come back to what is a major level. So it is really break or bust time now for the euro. If we move above 87.50, the trend line followers would say that's it, the trend line is broken, we have to look at a much bigger recovery now for the euro.

To try and shed a bit more light on this again I thought let's have a look at the short-term charts because again most traders in foreign exchange tend to be fairly short-term focused; maybe on the next few hours, next few days, and maybe a couple of weeks at a push.

But here's our EUR/GBP trend. So this is the rally that we've seen in EUR/GBP over the last month and we can see a fairly sharpish reversal over recent days. But again, I would say there is maybe a chance of another push again back up to this problem area around about 87.50 because again, as with some of the other charts we've been looking at this week, we see the odd dip along the way, but the market is showing us where it sees value for EUR/GBP. So only towards the end of September we saw a bit of a selloff for EUR/GBP, but it dropped back to around about 85.50. The buyers came back out again and bang, lifted the currency pair nearly a couple of hundred points in a matter of a few days.

So looking at the chart at the moment, yes, we've got this big level coming in. That's a real problem on the daily charts. But short- to medium-term there is still seems to be a fair degree of momentum for EUR/GBP. So personally I think, even if we do see a selloff back down to sort of 86.00, around about 60%, 70% points lower than where we are now, there is a chance of another springboard off that level looking to have a go once again at 87.50.

I think for me, as long as 85.50 stays intact, we've still got the chance of more upside for EUR/GBP. It doesn't change the big picture. The big picture is that level is still a problem. But I think over the next couple of days or so there is still a chance of a bit of momentum lifting EUR/GBP back up above 87.00.

That's it for me on Cantos Charts. I hope you found it useful and I look forward to talking to you again in the future.