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EURGBP Breaks Range Support, Targets 0.8600

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It appears that EURGBP sellers have cleared range support at 0.8745. It’s a level I have mentioned a few times in recent weeks including this past Monday.

We’ve been waiting for a break from this 270 pip range before making any further considerations. There were, however, a few opportunities to trade the range including the November 1 bullish rejection candle and the November 15 bearish pin bar.

On Monday, I pointed out that a move lower seemed likely given the impulsive nature of the September decline. This multi-month range was therefore corrective which meant a move lower was the most likely outcome.

Given Thursday’s close below 0.8745, I would suspect that sellers will defend the level as new resistance. Per Monday’s commentary, the next key support doesn’t come in until 0.8600.

However, there are a few things to keep in mind here.

First is the fact that these levels are sometimes considered areas rather than an exact price. So even though I write 0.8745, the area could extend as low as the November 1 low at 0.8732.

Second, it’s Friday. I’m not so concerned about the upcoming non-farm payroll as crosses like the EURGBP have a way of absorbing USD volatility. But putting on any trade with less than 24 hours before the weekend isn’t good practice.

Last but not least, the 10 and 20 EMAs are 80 pips above the current price. That means we could see some consolidation or even an intraday spike above 0.8745 before the next leg lower materializes.

I’m going to hold off, for now, to see how Friday’s session reacts to the new resistance area. I also don’t want to take on any new exposure ahead of the weekend.

As long as the 0.8745 area holds as new resistance on a daily closing basis (5 pm EST), I will remain bearish. I will also be on the lookout for a favorable selling opportunity next week as long as sellers maintain control into the weekend.

The first key support comes in at 0.8600. A daily close below that would pave the way to the target for this 270 pip range break at 0.8470.

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EURGBP break of range support on daily chart

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18 comments
Maddy says

Hii justin,
Even iam watching this pair lately….today morng i went short at 8840….ofcourse now at be☺️………yeah, you said right as it is friday you cant be clear as there is also NFP…even e/j and ucad have broken the trend lines but they reversed…but looking at gbp iam little bit inclined to go short on this pair….anyways now it is at be so no worries…..thank u for your forex setups.

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    Justin Bennett says

    You’re welcome.

    Reply
Douglas Ndamati Chinda says

Good morning Justin. Thank you so very much for this great selfless work you are doing. Empowering us that are new in forex with such knowledge, I am grateful indeed. Sir, can it be possible to give me/us daily trades?

Reply
    Justin Bennett says

    You’re welcome. Sure, that’s what these are. 🙂

    However, if you’re asking for signals, that is not something I would consider. The information I post here is for educational purposes only. When, where and how much you buy or sell is 100% up to you.

    Reply
Steve says

Waiting for a retest on the new resistance to confirm its not a fake out. But I’m going short with small risk just in case. Thanks for the heads up Mr Justin

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    Justin Bennett says

    You’re welcome. It is true that false breaks have been rampant in the last couple of weeks. That’s part of the reason I’m staying patient here.

    Reply
zaid tariq says

I’m in this. Looks Kind of Rectangle Pattern.

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Steven says

Thanks Justin i got that i will also wait and see

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    Justin Bennett says

    Cheers, Steven.

    Reply
mohammad haghshenas says

Hi Jastin,
Please tell me which may I enter to sell stop/sell limit close resistance as LWP (last whole price).

Regards,
Mohammad l

Reply
    Justin Bennett says

    Mohammad, you have to make that decision for yourself.

    Reply
Tu Dang Phuoc says

How does Brexit impact heavily to strength of GBP, EUR, not only for this pair but also against USD?

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    Justin Bennett says

    There’s lots of speculation around that but nobody actually knows the answer. I only focus on the price action. Everything else is just noise in my opinion.

    Reply
mingO says

tHanks you for your EurGbp setup

Reply
    Justin Bennett says

    You’re welcome.

    Reply
tolu says

i’ve also been watching it, but i’m not ready to trade until Tuesday because of the weekend and the effect of gaps on monday

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