Both the pound and the euro have been significantly dominant over the last few weeks, however the pound has been more so. There is a Bank of England monetary policy announcement on the calendar along with the Quarterly Inflation Report and a speech from Governor Carney. Additionally, Prime Minister May will be publishing a white paper containing her Brexit plan. We are not sure exactly what time the paper will be released but the monetary-policy announcement and Quarterly report could be more positive than negative for sterling as the central bank is widely expected to increase its inflation forecast. Due to the increase in expected volatility, I will be very cautious with my entries.

EUR/GBP Daily chart

Price has opened the month lower the beneath MPP, furthermore, the 21 and 55 ma's have just crossed to the downside. also, as shown by the back line, price has come off the 38.3-50% fib, projecting a target between MM1 and MS1, shown by the black lines. Support is in green, resistance in light red.

EUR/GBP H4 chart

As we can see, price is clearly at support with an oversold H4 stoch, so Ia pull back is needed to confirm an entry. I will look for a pull back to WPP, which is also the 61.8 from the previous high, and role reversal support, as well as the 0.85500 handle.

EUR/GBP H1 chart

We are opening the day at dm2, so we are at support, and thus must wait for a pull back to either dpp or preferably Dm3, as both coincide with role reversal support turned resistance, however dm3 coincides the downside trend line, the 61.8 fib retracement and the 0.8550 handle, definitely my ideal price for this trade.

One thought on “EUR/GBP daily short”

  1. Malesela Nkwe says:

    Excellent analysis Dom.. But I am afraid of this pair because I tend to be a bear on both currencies.. As such I am generally afraid to trade them against each other.. I also noticed that this pair does not have the required move in terms of pippage..

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