Kevin_Zhang
Long

7.42 Risk/Reward Shark on EURGBP. But are the fundamentals good?

OANDA:EURGBP   Euro / British Pound
Hi everyone, 

Shark   Harmonic Pattern  has just been confirmed on the 4-hour timeframe on  EURGBP . It has a PRZ formed of two ratios: 
0B projection: 1.13 
AB projection 2.24 

For take profits, we have: 
Management level: 0.87140 
Final take-profit level: 0.88114 

For stop loss, 0.85575 

This gives us an overall risk to reward ratio of 7.42. 

On the major timeframe analysis on the 1-day timeframe, there is a significant down-trending support  trendline  formed since the 10th of October 2018 which complements the PRZ formed of the two ratios. 

Also,  RSI  on the 4-hour has reached oversold territory, and in the 1-day timeframe, is very close to being considered oversold. 

With the terminal price bar already established confirming the two ratios, there has also been strong selling  volume  for the terminal price bar, indicating possible exhaustion of sellers. 

Now onto fundamentals: 
I'll be honest everyone, this isn't looking as simple as I'd like it to be. The Eurozone Consumer Confidence data comes out today in a few hours, and personally, I'm pretty  bearish  on this. However, I will still be looking at the actual data, and there are two cases that can happen here: 
Bad consumer confidence - Lower exchange rate of  EURGBP  (BAD) 
Good consumer confidence - Higher exchange rate of  EURGBP  (GOOD) 

Of course, this is quite obvious to anyone who is aware of basic  fundamental analysis  , but the significance of this would be more important long term. In the short-term, consumer confidence does have a negative causality with the unemployment rate. This means that it can give us a clue of what will happen with the Eurozone unemployment rate numbers coming out on the 1st of March. 

Overall, I am still leaning in with a buy position but I will definitely be watching the upcoming Consumer Confidence data, and making a decision to either close out or hold depending on that data. 

Thanks for reading! 
Kevin
Order cancelled: Just a quick update on the fundamentals from earlier today.

Eurozone Consumer Confidence was the same as estimated at -7.4. By staying the same as expected, there simply isn't enough incentive to buy at this point...

Onto the next opportunity!
Love it !
+1 Reply
@Lestarboi, Thanks! Be sure to follow me if you want more similar analysis. :)
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