EURGBP may retrace before going lower. Where to? Here is my view
As shown on the D1-graph, the EURGBP began to trade into a symmetrical triangle around September '14 which created a progressively higher bottom, while a gradually lower ceiling - with one single fakeout, which was rejected by the 200ema and resistance in 0.803, on the 19th of November.
Momentum has, since the summer, generally been bearish EUR, and this combined with a sexy candle with a large upper shadow, which also rejected the top of the symmetrical triangle and the 200ema, made me jump on the momentum and sell short at the first arrow, December 17th.
Two days afterwards, the price had broken the bottom of the symmetrical triangle, and then the price went down to the support of 0.7765 to 0.775.
Then we saw a retrace back to the old support, in the form of the triangle's bottom, which coincided with the 50% Fibonacci retracement and a rejection of the 50ema, and here, by the second arrow, I added further to my short position.
The price has now broken the bottom of 0.7765 to 0.775, and created a candle with a large lower shadow, on a minor level of support at 0.76. Today's candle, ceteris paribus, appears to shape an up-day, when the price closes higher than it opened. This suggests that sellers are not able to push prices lower at present time.
I assume that yesterday's candle will be the next swing low, and I will therefore look for a retracement back to the old support in 0.7765-0.775, which also coincides with the 50% - 61.8% Fibonacci retracement.
Around this level, a rejection of the 50ema, most likely, also comes into play, and if a candle with a large upper shadow, that penetrates the 0.7765 to 0.775 level, forms, I will add further to my position. This will be around the third arrow.
In the longer term, I see that the price may continue through 0.76, and down to 0.742, and I think the price should break 0.803 before we can talk trend-change, and I begin to be interested in going long in this pair.
I am strictly bearish EUR and the ECB meeting on Thursday is going to be interesting for the future of the euro.
Further additions, questions or discussions is more than welcome.
Happy Trading!
// Laban132
Momentum has, since the summer, generally been bearish EUR, and this combined with a sexy candle with a large upper shadow, which also rejected the top of the symmetrical triangle and the 200ema, made me jump on the momentum and sell short at the first arrow, December 17th.
Two days afterwards, the price had broken the bottom of the symmetrical triangle, and then the price went down to the support of 0.7765 to 0.775.
Then we saw a retrace back to the old support, in the form of the triangle's bottom, which coincided with the 50% Fibonacci retracement and a rejection of the 50ema, and here, by the second arrow, I added further to my short position.
The price has now broken the bottom of 0.7765 to 0.775, and created a candle with a large lower shadow, on a minor level of support at 0.76. Today's candle, ceteris paribus, appears to shape an up-day, when the price closes higher than it opened. This suggests that sellers are not able to push prices lower at present time.
I assume that yesterday's candle will be the next swing low, and I will therefore look for a retracement back to the old support in 0.7765-0.775, which also coincides with the 50% - 61.8% Fibonacci retracement.
Around this level, a rejection of the 50ema, most likely, also comes into play, and if a candle with a large upper shadow, that penetrates the 0.7765 to 0.775 level, forms, I will add further to my position. This will be around the third arrow.
In the longer term, I see that the price may continue through 0.76, and down to 0.742, and I think the price should break 0.803 before we can talk trend-change, and I begin to be interested in going long in this pair.
I am strictly bearish EUR and the ECB meeting on Thursday is going to be interesting for the future of the euro.
Further additions, questions or discussions is more than welcome.
Happy Trading!
// Laban132