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EURGBP Short at Confluence of Resistance

 

EURGBP Short at Confluence of Resistance

Hi All.

 

EURGBP Short at Confluence of Resistance

What is Driving The Euro?

Euro Forecast

The Euro entered 2017 on weak footing, particularly against the US Dollar with a range of threats keeping Europe directly in its sights. Yet as the calendar turns into Q2'17, it seems that many of these risks were overblown. Now, with political risks dissipating, EUR/USD may have a clear path for a run higher through the end of the quarter.

 

We are seeing EURGBP turn lower from the confluence of resistance. The confluence consists of the trend-line off the October high, underside retest of the broken November 2015 trend-line, and the 200-day MA.

The turn down from confluence and distance until significant support makes this a compelling opportunity. Looking lower from here support arrives in the 8300/50 vicinity; which would further develop out a big-picture descending wedge. The descending wedge break at some point is a whole other trade in of itself, but for now we are focused on the short-term opportunity within the pattern.

With the current price at 8542 and a stop about 20 pips above yesterdays high at 8635, the stop-out is under 100 pips. With support a couple of big figures lower this leaves ample room for profit, thus giving a good risk/reward profile of around 1:2. There could be some support on the shorter-term lower parallel in the low-8400s, but only viewed as a potential speed-bump at this time.

EURGBP: Daily

Trade Criteria:

Entry: Market price (currently 8542)

Stop: 8635

Target: 8300/50

PLEASE SHARE YOUR POINTS OF VIEW

Sat, 05/20/2017 - 5:54am