EUR/GBP Changes Trend After Rejecting Key Resistance
EUR/GBP – Sell the rallies under resistance As discussed in our recent commentaries, the EUR/GBP has been trending lower after topping out in October 2016. In the chart below, we can see two big reversal areas, notated as ‘event area’s’, which lead to a sharp decline in prices, and a change in trend direction. The market has since experienced a vacuum back up to test these areas recently. There is now a confluence of factors that have come together to support our current bearish view on this market.
We can see a band of obvious strong resistance starting up near 0.8850, at the previous event areas, which are now containing the market, and an approximate 50% retrace of the initial swing lower. It all depends on the line in the sand at 0.8850 for sellers; if price is below that containment level, we expect more downside movement.
Traders can look to be sell on strength whilst under that 0.8850 level, and we would hold short positions until a strong break or close back above 0.8850. To the downside, targets are near 0.8340 or even lower potentially.
EUR/GBP Daily Chart
Original Article Source: LearnToTradeTheMarket.com