EURGBP
Has been range bound for an extended period of time. Started the day at the range's upper limits, the area where there was a strong price rejection in May & Oct of 2015. The difference now is the bulls are still in control.
This is on my watch list for next week. Earlier this morning, I expected .7480 - .7489 resistance to be tested again before pulling back, but I also expect .7490 to hold. I wasn't planning on trading because I thought it would take too long for any trade to develop (resistance holding and confirmation of price reversal) and I didn't want to be holding on to this position over the weekend. As I mentioned, while I'm not surprise .7488 - .7490 was tested, I expected it to hold and I did not expect .7517 to be tested.
Two key resistance areas I'll be watching: .7516 - .7518 (which is currently at jeopardy) & .7566 - .7568
Expected Trade Plan (based on current situation):
- If .7518 holds, I will look for opportunity to short with a possible target of .7340. Of course this depends a lot of the movement over the weekend and assuming favorable risk/reward.
- If .7518 is breached but .7568 holds, I'll need strong rejection of the resistance zone and two to three supporting confirmation of bulls gaining control. Possible target is .7390. Because of the additional confirmation and reduced target, it is less likely that a trade will actually occur because it will be harder to enter the trade with a favorable risk/reward.
- It could indicate a breakout if EURGBP moves through both of the above resistance zone.
The above trade plan is based on limited data and only after brief analysis.
Your comments are welcomed.
