Hello traders,
Yesterday the economic calendar was scarce with important news and as the USD continued to slide, opportunities were found in other currency pair. Today we shift our attention to the EURGBP bearing in mind that today we have some news from the UK which can spark volatility. Yesterday we had the monthly French Industrial Production and even if it is not very timely as it was released 40 days after end of November, it still provided some hindsight on how inflation is in the Euro zone and right now, inflation from adjusted input value grew by 2.2%, which is not bad for an economy struggling with deflation. With this, the Euro gained momentarily against the Pound before retracing from Monday’s high and closing the day as an inverted hammer.
The Daily chart will be my main focus and given my skew on euro weakness, the formation of that hammer at an overextended price-since price action closed above the upper BB means price will correct and it is in my opinion that the path lower will be of easier resistance. Note also the upper wick reversing close to the resistance line at 0.88 and there is a bearish divergence developing with stochastics moving lower while prices move higher.
My strategy for today will be to enter in the London session and initiate short positions before December’s Monthly production data is released. Consensus is for a 0.6% rise after November’s contraction. Entry will be at the 1 Hour chart either with a sell stop or with a sell limit at the following resistance or support zones:
Sell Limit placed at immediate resistance:
Sell Limit: 0.8690
Stop Loss: 0.8740
Take Profit: 1:3-5 risk reward ratio level at your own discretion
Sell Stop at support at;
Sell stop: 0.8650
Stop Loss: 0.8690
Take Profit: 1:3-5 risk reward ratio level at your own discretion
Have a good trading day.

EURGBP 1HR Chart-11.01.2017

Source: Dalmas Ngetich

EURGBP Daily Chart-11.01.2017

Source: Dalmas Ngetich


  1. Thanks Dalmas , excellent detail trade plan 🙂

    1. Thanks Chan. Its consolidating and no meaningful swings has been made.

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