EUR/GBP - Short retrace back into S/R zone before new leg down

EUR/GBP breached a strong support & resistance (S/R) zone in one H4 candle. We can therefore expect price to move back into the zone due to some profit-taking on a Friday, as well as the larger money increasing their position before pushing price lower.

Look for price to move into the 0.9050 - 0.9100 zone before continuing its descent. This would be a favourable trade opportunity, as if price breaches this zone in any meaningful way then the market has invalidated the downward movement.

All the best.

DD

Comment:

Price is currently sitting at the top of our identified zone. We had a rejection candle on Friday, and currently price has revisited that at the open. There's no way to tell why, as things are very volatile at the moment with the Trump factor.

You have two options:
1. Take an aggressive entry now (ideally with smaller position size and scale in). The issue with this is you might get volatility stopped.
2. Wait for a strong rejection of the zone. The issue with this is that price may go sideways for a little while until the market sorts itself out. Therefore you may be left holding a losing position for a period of time (and will need a larger stop loss).

Neither is perfect, but I prefer 2. Waiting for confirmation is usually best.