Free Profitable Forex Newsletter
Hey! This is Philip with this week's trade idea of the Free Profitable Forex Newsletter!
Bearish Setup On EURGBP Can Provide A Good Selling Opportunity
The EURGBP currency pair has risen steeply on intraday charts over the past two weeks and has now reached strong resistance in the 0.8700 area.
There is not much to say here other than this pair is trading a lot on Brexit noise and that will continue to be the case. However, GBP has fallen rather too much recently amid the latest Brexit developments (unsuccessful Conservatives - Labour cross-party talks).
This negativity seems a bit overblown, and GBP is likely to rebound on the next positive Brexit headlines. So the 0.85 - 0.87 range in EURGBP is likely to hold for now and given that we are at the top of this range, short positions look interesting and attractive.
In addition, there is the European Parliamentary Election, which is to be held next week, and the risks around it should also keep the Euro contained.
As we said earlier, we are looking to trade the daily 0.8500 - 0.8700 range looking for another bearish leg down. The 0.8700 area is an important technical area in the past 2-3 years, and additionally, the 100-day moving average is also around these levels presently.
On the lower timeframes, we see a steep uptrend which has stalled for a while but is now again challenging the resistance. One of the support trendlines was already broken, but the broader bullish channel still holds. A bearish break of the channel would be an additional confirmation on the intraday timeframes for a bearish reversal.
If the trade will work well, the first levels to target lower will be the 0.8600 area where the 55-day moving average and the monthly pivot point meet. The bottom of the range around the 0.8500 area can be the second target.
- Look to enter around current levels of 0.867590 and closer to the 0.8700 resistance;
- Perhaps wait for stronger bearish confirmation (say a run on the stops toward 0.8700 and a sharp reversal there)
Stop loss:
- Above 0.8715 to allow more breathing room for the trade, though EURGBP should not move much above 0.8700 if everything will work well on this trade.
Targets:
- 1st toward the 0.8600 area (as described above)
- 2nd at the 0.8500 area - bottom of the range
Trade signals from the past week
- April 17, 2019 – Short Gold from $1275, in the end, the trade didn’t work amid the latest US-China escalation; closed at $1285 on the news = -$10 per ounce = -100 pips profit
TOTAL: -100 pips in the past week
TOTAL: +970 pips profit since October 1, 2018
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