A few days ago I proposed a long position on this pair, due to extreme deviation from value and a bullish divergence
. In that chart, I said that when this pair will move to value, it will be a shorting opportunity. Well, it didn't quite get their, the response from the bullish divergence
was weak. Eurgbp
rallied to the first resistance, which is pretty close to value, and rejected it, drawing a bearish engulfing
due to good data from the UK. The monetary policies from the two central banks are diverging, so this pair should move lower in the coming weeks. First major support stands at 0.7700, as you can see from the weekly chart
. I expect a move lower to 0.7750, I allready entered a short at .079350, with a soft stop above this swing high.