EUR/GBP Technical Analysis: Short Trade Back in Play
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EUR/GBP Technical Analysis: Short Trade Back in Play

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Talking Points:

  • EUR/GBP Technical Strategy: Short at 0.7876
  • Euro breaks monthly channel resistance, hints at move above 0.79 vs. Pound
  • Dominant long-term trend still points downward, painting gains as corrective

The Euro may be readying to turn lower against the British Pound after prices put in a bearish Evening Star candlestick pattern . In broader terms, the pair may be in the process of carving out a broad Head & Shoulders top after testing down trend resistance in play since December 2008.

Near-term support is at 0.7913, the 38.2% Fibonacci expansion , with a break below that on a daily closing basis opening the door for a test of the 50% level at 0.7968. Alternatively, a push above horizontal support-turned-resistance at 0.7928 paves the way for another challenge of the long-term trend line, now at 0.8108.

Technical positioning agrees with a 2016 fundamental outlook calling for EUR/GBP down trend resumption and risk/reward parameters appear acceptable. With that in mind, a short trade has been triggered at 0.7876, initially targeting the April 26 low at 0.7735. A stop-loss will be activated on a daily close above the May 4 high at 0.7947. Half of profits will be booked and the stop-loss adjusted to breakeven when prices reach the first objective.

Losing money trading EUR/GBP ? This may be why !

EUR/GBP Technical Analysis: Short Trade Back in Play

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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