EUR/GBP: Short Term Sell Opportunity
Vladimir Ribakov | Oct 28, 2013 07:39AM ET
EUR/GBP has been trading higher from the past couple of weeks, and now I think the pair might create a top soon and mover lower again. So, I think we should be looking for short term sell opportunities for this particular pair.
Looking at the 4 hour chart of EUR/GBP, there are two up-move trend lines as shown below. In order to enter a sell trade, we need the pair to break the first trend line and the immediate support which is currently at around 0.8520, close below it and form a bearish candle pattern. If the pair successfully manages an hourly close below the trend line, then we will enter a sell trade. Alternatively, if the pair does not move lower, then we may look to sell new highs above 0.8550. So, we will wait for the pair to make a move and then trade accordingly.
Initial target should be around the last trend line as plotted on the chart shown below and final target can be around 200 four hour moving average. Stop should be placed above the previous resistance.
Reviewing Friday’s events and trades
US dollar continued its decline and losing streak on Friday as well. Fundamental data released too disappointed the market as Core durable goods orders registered a decline to -0.1% missing the expectations of 0.5% and Michigan consumer sentiment too declined to 73.2 to 75.2. Other than this German IFO business climate index missed to expectations to register a reading of 107.4 and UK GDP data came as expected. Overall, market is still not willing to buy dollars, and that is the reason why we can see dollar not gaining against the majors.
Fundamental Outlook for the day
Today we have two important fundamental events scheduled from the US, including US Industrial production data and pending home sales data. Pending home sales data is expected to show some improvement from the previous outcome and industrial productions is expected to remain steady. If the data does not disappoint, then we can witness some dollar recovery later in the day.
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This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EUR/USD, AUD/CAD, NZD/USD and NASDAQ.
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