EUR/GBP short; 20th march

Last week we saw pound strength against most of its major counterparts; excluding that of the yen. This was due to Hawkish tones coming from the BoE meeting minutes. According to the minutes, a number of policymakers believe that a “rate hike could be needed sooner” with MPC policymaker Kristen Forbes voting for an immediate 25bp tightening. Although the triggering of Article 50 is said to occur within the next two weeks, until further information is released I am a bear on this pair.

EUR/GBP Daily chart

Price has reached bullish target at MR2; thus according to pivot point theory, price may return to MPP. Price has been unable to break above 0.8800; and I believe 0.8700 will act as next level of resistance.

EUR/GBP H4 chart

Price is trading within a descending channel, displaying lower lows and highs, as shown by black lines. Price is opening at WM2, which is a bullish entry zone, however according to this channel, it is opening at a lower low, And I will look to sell the lower high, which may occur around the WPP area; which is also role reversal support turned resistance; it is the 0.8700 psyche number; and it is within the 50%.61.8% fib retracment zone.

EUR/GBP H1 chart

Price is approaching the DM3-DR1 area, which are bearish entry zones; they also line up with the psyche number of 0.8700, role reversal support turned resistance , as well as the 50%-61.8% fib; this is also the WPP area on the H4 chart, making this a nice area of confluence for a bearish entry.