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EURGBP Fails to Retake 0.8980

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Last Thursday we looked at two resistance levels that could trigger a reversal on the EURGBP. The first was 0.8925 and the second 0.8980. However, I mentioned in that October 5th commentary that I suspected bulls wanted to take prices to 0.8980.

Just 24 hours later that retest came to fruition. That turned our attention to the 0.8980 handle over the weekend. The idea was to watch for bearish price action for a return to 0.8744.

Yesterday’s session reached a high of 0.9032 just before a sharp selloff that would eventually close the pair back below 0.8980. As a result, the Thursday session formed a bearish rejection candle and a quasi-engulfing pattern if you use the candlestick’s range.

From here I favor a move back toward the September low at 0.8744. A break below that would target the 0.8600 handle and perhaps even the current 2017 lows near 0.8370.

Keep in mind that all of this is unfolding following the break of channel support on September 12. That was a significant breakdown in the sense that it ended the uptrend which began in May.

The 0.8880/90 area could also attract a few bids on the way down. In fact, I’m seeing it happen as I write this post. But this could also offer an opportunity to get short if you missed an entry during yesterday’s selloff.

Of course, we’ll have to see how price reacts to the 0.8880/90 area to know for sure. And since today is Friday, it might be a good idea to wait until Monday to make a decision. That way you aren’t exposing your account to the possibility of a weekend gap.

As always, the decision is yours. My preference is to continue to watch for selling opportunities for an eventual retest of last month’s low at 0.8744.

And because of the September 12 break of channel support, my bias will remain tilted toward the current 2017 lows near 0.8370. It would take a daily close above 0.8980 to alter my bias.

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EURGBP bearish rejection candle from key resistance

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14 comments
Farai says

Thank you Justin

Reply
    Justin Bennett says

    Anytime, Farai.

    Reply
Siphamandla Mkhize says

I love your analysis sir, I think it is spot on

Reply
    Justin Bennett says

    Pleased to hear that. Thanks for stopping by.

    Reply
Fabrizio says

Hi Justin why is not 09032 the new resistance and 8990 the new support? Thank you

Reply
    Justin Bennett says

    Take a look at the areas I highlighted in the chart above.

    Reply
Sifiso Mpofu says

Before we can consider any line as support or resistance, It all depends on Daily closed candle not during the day…. coz it may make a big bullish candle through resistance but b4 the end of the day it looses all that gain of candle and THEN we get…. A PIN BAR in the Zone….. and we know wat all that means

Reply
Peter promise Igbokwe says

Thanks Justin…happy

Reply
    Justin Bennett says

    You’re welcome.

    Reply
Hegazy says

Hi.
I consider myself a beginner, but I wonder why you ignored the strong uptrend extending from Nov. 15 in your analysis.

Reply
PR Chivhambo says

Thanks Justin.
Your analysis are simply.

Reply
art says

in your example, please include the time frame chart being displayed

Reply
    Justin Bennett says

    See the top left corner of the chart. Also, 99% of the commentary on this site takes place on the daily time frame.

    Reply
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