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EURGBP Shorts Favored Below .7290

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I have been bearish on EURGBP for quite a while. In fact I put out commentary on December 23rd of last year referencing the bearish pin bar that had formed after breaking wedge support.

Then on January 14 I published commentary referencing the idea that EURGBP was likely to hit .7258 this year. That idea came to fruition in quick order as the pair currently sits at .7260.

Needless to say, I have been bearish on EURGBP for quite some time. In recent weeks, however, the pair has seen a decent recovery as it has managed to climb 370 pips higher from the March 11th low of .7013.

Of course 370 pips is a considerable rally, especially for EURGBP – a pair that doesn’t see many days over 100 pips. But it’s important to keep this rally in perspective.

Since the start of the year the pair is down almost 600 pips. That in and of itself is enough to question the integrity of the recent rally.

On top of that EURGBP failed to push higher after last Friday formed a bullish pin bar at the .7290 key level. Not only did the market fail to push higher, it has now closed below the level for two consecutive days this week.

So where to from here?

There are two support levels I’m keeping an eye on. The first being .7155 which can be seen acting as support and resistance in mid March. The other is of course the 2015 low at .7013.

I would like to see the .7263 level hold on a daily basis. A close above this level could result in a continuation of the recent rally.

Note: Keep in mind that we have several news events in store for the USD for Thursday and Friday, one of which is NFPs. This will likely cause in increase in volatility.

Summary: Opportunity to trade yesterday’s inside bar / bearish rejection bar. Key support comes in at .7155 and .7013. A daily close above .7263 would invalidate the setup.

EURGBP bearish inside bar on the daily time frameAUDNZD analysis

AUDNZD daily forex chart

 

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