11 Sep Weekend Analysis For W/C 12th Sept 2011 EUR GBP
EUR GBP has ranged in a tightening triangle pattern for 3 years now. Despite this there have been some great trades along the way even if I do struggle to decide whether I’m bullish or bearish!
Lower highs and higher lows have been met with a consistent MACD downtrend which could suggest the bearish trades are slightly more attractive.
For some time I’ve had a line in the sand on the weekly chart set at approx. 0.8664 which may not technically be solid S/R but has offered the ability to take positions in either direction using it as a reference for stop loss positioning.
Last week we saw a break of that line so I’m now looking at options to consider short entries on it’s retest over the next week or 2. Worth keeping an eye on the upwards sloping trendline which is likely to make an attempt of offering support, and more likely if broken, would act as a short entry target if it’s retested from the underside, but for now 0.8664 is the area I’m watching on the weekly chart:
Moving onto the daily chart I have placed S/R’s in different and probably more prominent locations. If we do see an accelerated move to the downside, then the ultimate target would have to be the gap that price left behind back in September 2010 – A very attractive target particularly as it coincides with solid support.
This gap will almost certainly get filled at some point in the future, but predicting the move that will take us there is a little more difficult, but I fancy that now is an important time to be considering such possibilities.
Old chart, showing the gap: