ICmarkets

EUR/GBP: Technical outlook and review.

FX:EURGBP   Euro Fx/British Pound
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Weekly Timeframe: The EUR/GBP             pair is now trading around serious weekly demand at 0.76931-0.78623 thanks to a 200 pip decline in value seen last week; this was likely fueled by the recent events surrounding Scotland. Overall, our bias for this pair is very much long, with the expectation of prices eventually trading back up to at least the weekly supply area at 0.81571-0.80635.

Daily Timeframe: Last week shows price reacted beautifully off of daily demand at 0.77894-0.78271 forming a bullish pin-bar candle, which so happens to be the second layer of stacked daily demand (First has already been consumed ). However, the only way to find out if this buying was legit, and not just traders liquidating their short positions, would be a follow-through to the upside, and on this timeframe we see very little stopping price from rallying all the way up to daily supply at 0.80084-0.79702.

4hr Timeframe: The 4hr timeframe shows a different story however. The bearish pin-bar candle (0.78777/0.78665) that formed off of 4hr supply at 0.78963-0.78777 just before the market closed last week, has so far seen very little follow-through selling. The reasoning for this could well be because price is currently located in higher-timeframe demand (Weekly: 0.76931-0.78623, Daily: 0.77894-0.78271).

Anyone who has sold around this 4hr supply area may want to consider being extra aggressive with trade management here, since a push higher is likely. With that being said, for us to even consider buying this market, a break above the pink level at 0.79133 would have to happen, this way we can be pretty confident most of the selling opposition has been consumed, making any long entry taken after that less stressful.

Pending orders/Price action confirmation levels:

• Areas to watch for buy orders: Pending orders: No pending buy orders are seen in the current market environment. Price action confirmation levels: No price action confirmation buy levels are seen in the current market environment.

• Areas to watch for sell orders: Pending orders: 0.79882 (Stop loss: 0.80103 Take profit: Dependent on how price approaches). Price action confirmation levels: No price action confirmation sell levels seen in the current market environment.
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