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Today’s commentary starts with an update on EURGBP, a pair that was covered yesterday. For those who entered short based on yesterday’s setup, this next leg down could be an opportunity to pyramid. For others, it could be a chance to enter short.
Yesterday I mentioned that we should watch for a retrace back to .7755 to trigger a short trade OR wait for a 4 hour close below .7735. That close came just hours after I released the commentary, which led to a 105 pip intraday drop. The pair did recover some before the close, but it wasn’t enough to overcome the .7690 handle.
From here we can watch for bearish price action on the 4 hour chart between current levels and .7690. I like this pair lower, however I do think we could see some buyers around .7590. The long-term target of .7250 is still in play.
Summary: Watch for bearish price action between current levels and a retest of .7690 as new resistance. Support comes in at .7590 with a long-term target of .7250.