EURGBP Sell Setup - Breakout of 4hr Trend

FX:EURGBP   Euro / British Pound
87 0 4
4hr Timeframe.

1. Sustained selling volume for 4 bars.
2. Touch trend line before break.
3. Break of RSI trend carrying from 5th sept.
4. relative negative sloping on UO.
5. Bounce off of major resistance level at 0.87011.

Watch for break of the trend line then enter on the pullback after it is identified.

GBP pairs are in a unique situation after the Brexit vote as uncertainty continues to loom, contradictory economic data is released, the British political world is in turmoil and decisions to cut rates even further are haunting the pound. All the time these pairs are deciding the overall direction they are headed, we can take advantage of major levels which they appear now to be respecting such as the one shown on this chart at 0.87011.
Comment: One criticism of this particular setup is that the volume as seen above may taper off. The kind of volume we would like the take this position would ideally be sharp and quick under the trend line to indicate a large dumping of the currency.

However as we can see the negative volume is rather prolonged and appears to taper off on the 1 Hr which may indicate the trend is too strong for price to break and close below.

Not to fear though - even if it doesn't break at this time, there will most likely be another push down to the trend line if price does in-fact bounce again. Not only this but as mentioned previously there is a major post Brexit resistance level above which should help us out in pushing price into our preferred areas.
Comment: We can see at 6PM GMT price has broken through our trendline.

However not with great force/volume nor with much direction. This opens up price to move in a trend less, and directionless state therefore making a short entry harder to justify at the moment.

Despite this I am confident the resistance above will hold so a short is very much on the cards.
Comment: Top resistance didn't hold therefore we didn't enter short, no capital lost on this trade since it didn't hit the rules before entry.

Trades can win and lose - by using a set of rules in an algorithm to control your trading you can control your losses.
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