ICmarkets

EUR/GBP: Technical outlook and review.

FX:EURGBP   Euro Fx/British Pound
31 0 0
Weekly Timeframe: Price is once again seen trading around a huge weekly demand area coming in at 0.76931-0.78623. We have to be honest here, considering only the weekly timeframe for a minute; we would be very worried if we were buyers, as this demand area is not exactly showing any bullish strength at the moment.

Daily Timeframe: The daily timeframe shows that price is currently trading within a daily decision-point demand area seen at 0.78468-0.78986. This area is very important in our opinion, so much so that if price breaks below this area, the path south would likely be clear for the sellers to test a daily demand area coming in at 0.77507-0.77772, which is conveniently located very deep within the weekly demand area mentioned above at 0.76931-0.78623.

However, assuming that we get favorable price action on the 4hr timeframe, this would be a perfect area to go long from targeting the daily Quasimodo resistance level at 0.80351. Let’s take a look!

4hr Timeframe: A sharp selloff has been seen from a beautiful-looking 4hr supply area at 0.79409-0.79204. This move consumed both the round-number level 0.79, and also the 4hr support level coming in at 0.78882.

A potential selling opportunity may be forming, which if taken will need to be done so with caution, since we mustn’t forget price is still trading around higher-timeframe demand at the moment (Weekly: 0.76931-0.78623, Daily: 0.78468-0.78986).

With that being said, we see a clear path down to a 4hr demand area at 0.78468-0.78595 (active buy orders are seen just above at 0.78616), which is located deep within the aforementioned higher-timeframe demand areas. However, the big guys may need to fill some of their unfilled sell orders before being able to move price down that far. The most logical area would be the 0.78882 level, but with the round number 0.79 looming just above, it opens the possibility for a fakeout to ensue. Take a look on the hourly chart, there is a beautiful 1hr decision-point supply area seen at 0.79018-0.78944, this is where we believe a reaction will likely be seen (active sell orders seen just below at 0.78928), and if we target the aforementioned 4hr demand area, this could turn out to be a very rewarding trade.

Buy/sell levels:

• Buy orders: 0.78616 (Predicative stop-loss orders seen at: 0.78444).

• Sell orders: 0.78928 (Predicative stop-loss orders seen at: 0.79065).

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