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EURGBP Two-Year Wedge Pattern Emerges

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EURGBP has been in rally mode since mid-2015.

After reaching a multi-year low at 0.6930, the euro cross quickly bounced back, putting in a multi-year high in October 2016.

However, you wouldn’t know the EURGBP is in an uptrend looking at the price action since July of 2016.

For the last two and a half years, the euro cross has been range bound between 0.8300 support and 0.9300 resistance.

But we have a new structure in play since the November 2018 low.

It seems EURGBP has carved a wedge pattern that is best viewed on the weekly time frame.

You can see how the pair has struggled for the last few weeks around 0.9030. There was even a bearish pin bar three weeks ago.

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Since that time though, buyers have been relatively stubborn.

It’s an indication that, in my opinion, the EURGBP is getting close to breaking free from this two-year pattern.

Given the uptrend that began in July 2015, a break higher seems to be the most likely outcome.

There are a few possible targets if we do see a weekly close above wedge resistance.

The first is 0.9300. As I mentioned above, it’s the range ceiling that has been in place since August 2017.

The 0.9300 handle is followed by 0.9500 and then 0.9800. Both levels were key factors in 2008 and early 2009.

As you may know, there is also a measured objective here.

When trading a wedge like this, you can use the height of the pattern to identify a final target/objective.

That’s easy to measure since we know the bottom is 0.8300 and the top is 0.9300 which gives us a height of 1,000 pips.

If we then measure 1,000 pips above wedge resistance, we get parity or 1.0000.

I can assure you that there will be plenty of sellers around parity if EURGBP reaches it over the coming months.

Of course, there are no guarantees.

The pair may also break lower which would expose range support at 0.8300.

But all in all, this appears to be a bullish formation. And the fact that parity is the 1,000 pip objective could be a significant clue.

It’s a waiting game for now though. Buyers first need to secure a weekly close above wedge resistance near 0.9030 to confirm the breakout.

Until then, EURGBP is vulnerable but only as far as the 0.8730 support area.

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EURGBP weekly wedge pattern

Leave a Comment:

24 comments
Tosyno says

Thanks a lot Justin!…Thought as much.
Happy New year to you.
God bless you for your great works.

Reply
    Justin Bennett says

    My pleasure. Happy New Year.

    Reply
alex says

Excellent always following you..

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Davy says

Why are you bullish when you saw that bearish pin bar?

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    Justin Bennett says

    Davy, have another look. I didn’t say I’m bullish.

    I wrote that the pattern (in the context of the uptrend) appears to be bullish. There’s a big difference between the two. I even wrote that EURGBP is vulnerable below 0.9030 resistance.

    Reply
Simon says

Justin your analysis are always on point. I’ve been following you since January 2018. Despite that they is no holy grail in forex I guess you are a Wizz on diz. Justine did you lose any trade in 2018? I need your answer oh to stay inspired.

Reply
    Justin Bennett says

    Yes, I had losing trades in 2018.

    Reply
fawaz bamakrait says

thanks justin ,i realy like the way you trade .amazing man .

Reply
    Justin Bennett says

    Glad to hear it. You’re welcome.

    Reply
Anita says

I am now begining to learning and understading the way you análise. Great mentoship Justin.

Reply
    Justin Bennett says

    Glad to hear that, Anita. Cheers.

    Reply
Agrey wihala says

Thanks mr justine for your good job

Reply
    Justin Bennett says

    You’re welcome, Agrey.

    Reply
Euphemia Nwachukwu says

Thanks Justin, for the commentary. Happy new year. The year is going to be great for all of us at DPA, in Jesus name amen.

Reply
    Justin Bennett says

    It’s my pleasure. Happy New Year.

    Reply
Dee says

Thanks alot brother, I’m in the process of registering for main channel

Reply
    Justin Bennett says

    You’re welcome. I look forward to seeing you on the inside.

    Reply
Vosemen says

Hello Justin, I came across your blog early December 2018 and it has really impacted on my analysis.
Every day I spend hours reading articles in this blog. I’m a year and five months into Forex trading and usaually do my analysis on the 1hr time frame. But since switching to the daily charts my losses have greatly been minimised. Thanks to your mentorship I was also able to spot the USDCAD and EURGBP setups before you posted them.
Although my analysis was on the dailys, my entry was hourly. I also think the eurgbp setup is ranging between 0.9030 and 0.8708 region. I went bearish and locked over 50pips today.

This is my first trade this year and indeed a great new year. Thanks you Sir👍

Reply
    Justin Bennett says

    Pleased to hear that. And you’re very welcome.

    Reply
Collinzo says

Please I am new to trading. Justin your analysis is awesome. Please what is best time frame for me minimize my loses. Please advise me.

Reply
    Justin Bennett says

    I prefer the daily time frame.

    Reply
DANIEL says

My man, my Genius! Your analysis are so down to earth and simple. This is definitely how I like trading…not some Hollywood graphics of indicators on screen.

Please comment, I see a Descending triangle! with the top resistance line and the the support area between 0.8700 and 0.8650(50 pips area). I think…a fall from current high is in order with the bearish pinbar to this support area. Pls comment on this, once again, thx.

Reply
    Justin Bennett says

    Simple is best. Cheers.

    Reply
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