I'm getting interested in a potential short opportunity on EUR/GBP on the 4H. Price is at a longer-term resistance level (red line), which coincides with a higher timeframe downwards trendline (black line; connect the highs on the daily to see it).
Additionally, trend structure has been really nice and clean, the price has reached the 200% Fibonacci extension level and shows early signs of rounding off, with multiple bearish pin bars having formed recently. Slight RSI divergence as well. The ECB hasn't made any big waves with their interest rate announcement today and it looks like the price might find its way down soon.
Plenty of room to the downside, with the first real support area around 0.85900. If it manages to break this level, I would set targets at 0.84900, keeping into account potential support from an upwards trendline on the daily. But first, I want to see the price break and close around 0.86500, which is where I have my price alert set.
Good luck trading!
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Additionally, trend structure has been really nice and clean, the price has reached the 200% Fibonacci extension level and shows early signs of rounding off, with multiple bearish pin bars having formed recently. Slight RSI divergence as well. The ECB hasn't made any big waves with their interest rate announcement today and it looks like the price might find its way down soon.
Plenty of room to the downside, with the first real support area around 0.85900. If it manages to break this level, I would set targets at 0.84900, keeping into account potential support from an upwards trendline on the daily. But first, I want to see the price break and close around 0.86500, which is where I have my price alert set.
Good luck trading!
For more analysis and forex trading articles, visit smartforexlearning.com and follow:
- on Twitter: twitter.com/smartfxlearning
- on Facebook: www.facebook.com/smartforexlearning
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Comment:
The bearish pin bar that has just formed shows a nice rejection of the levels I previously described. Still too early for me to get in, but it definitely adds to the confluence of this setup.
Order cancelled:
The market took ECB Draghi's changed message as a positive and started to rally. Price never actually reached my price alert at 0.86500, so I took no action on this trade idea.
The first place I would look for a new reversal opportunity would be at the previous swing high, around the 0.88300 level.
The first place I would look for a new reversal opportunity would be at the previous swing high, around the 0.88300 level.