Published On: Fri, Mar 3rd, 2017

Ending wedge and Fibonacci highlight limited upside for EURGBP

InstaForex

Background

Today we look at short-term counter trend trade in EURGBP. 

Weekly – the eventual bias is to move lower towards the AB=CD formation target and breakout level of 0.7500.

Source: Saxo Bank 

Daily – I believe we are in a large bearish head and shoulders pattern. However, it is likely that the CD leg (of the correction higher) is not complete. The AB=CD target is located at 0.8948. Thursday’s price action posted a Doji style candle at the cloud base. 

Source: Saxo Bank 

Intraday (four-hours) – moving higher in the first inside leg of CD. We have posted a DeMark exhaustion count on the intraday chart so scope for a short-term top to now be in place. 

 Source: Saxo Bank

Intraday (one-hour) – moving higher inside the ending wedge formation. We now look for limited upside. 

Source: Saxo Bank

Management and risk description

There two ways to play this corrective trade:

Parameters


1.

Sell:at 0.8616    

Stop:at 0.8660       

Target:0.8510
2.

Sell:a break of 0.8565        

Stop:at 0.8590       

Targets:0.8510 and 0.8465

Time horizon: short term; 3-4 sessions

— Edited by Jack Davies

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