The pair EURGBP
has been in a bearish trend
since the 1st of April 2020. By looking at the monthly chart we can immediately notice that there is a strong resistance level
that the market rejected in March and April 2020. In March 2020, the market rejected this area and created a 600 PIP wick. When the market rejected this price level in April 2020, we saw 193 PIP move to the downside. We can also see a very short top wick on the on the April 2020 candle, indicating big bear pressure. Now that we know this information, we have to look at the lower time-frames to get a better idea of how to trade this pair.
Looking at the 4H time-frame we can notice that we have a strong resistance area
between 0.88466 and 0.88627, marked on the chart as "Selling Zone". We're expecting the market pullback from the strong resistance zone
, with our target at 38.20% fib level as target 1 and 61.80% fib level as target 2. Stop loss is placed above resistance zone
just in case we get huge wick to the upside.
- Fundamentals to watch out for:
1) U.K. Gross Domestic Product (GDP) @ Wednesday, May 13th 2020, 9:00 AM GMT
2) U.K. Manufacturing Production MoM @ Wednesday, May 13th 2020, 9:00 AM GMT
3) U.K. Extension of lock down, which indicates weaker GBP.
Risk ONLY: 2-3%