The British pound recently moved lower against most major currencies, including the Euro. However, the upside in the EURGBP pair should be limited as there is a monster resistance on the way up for the pair. There are several patterns forming, but in this post we will discuss a way in which we can enter into a short-term sell in EURGBP.
There is an important bullish trend line forming on the hourly chart of the EURGBP pair. There is a critical support area around the 0.7840 area, which also coincides with the highlighted trend line. So, if the pair moves lower from the current levels, breaks the trend line and support area and settles below the same, then we can enter into a sell trade.
Initial target should be around the 0.7800 level, and final target could be around the 0.7760 level. Stop should be placed above the last high created.
Major events scheduled in the upcoming week
There was a minor miss in the US NFP during this past week, which has ignited a correction in the US dollar. The pairs such as EURUSD, GBPUSD and AUDUSD were seen trading a touch higher recently. There is no doubt that there is a shift in the market sentiment, but we need to be careful in chasing the same, as this might be seen as a buying opportunity in the US dollar moving ahead. We need to see how the upcoming releases play out and impact the FX market in the near term.
Let us look at all major events lined up in the upcoming week.
Sunday – No economic release.
Monday – Chinese CPI and Canadian housing starts data.
Tuesday – Chinese new loans data, US NFIB business optimism index and RBNZ interest rate decision.
Wednesday –UK employment data, BOE inflation report and US wholesale inventories data.
Thursday – Chinese industrial production, German CPI and US initial jobless claims.
Friday –German GDP, Italian GDP, Euro area GDP, US retail sales and Michigan consumer sentiment.
This analysis is taken from Weekly Market Forecast, which also includes trade opportunities on: GBPCHF, EURGBP, USDJPY, EURJPY, GBPJPY, AUDUSD, NZDUSD, AUDNZD, EURAUD, USDCAD and AUDCAD.
Get it HERE: Vladimir’s Markets Forecast
Happy trading friends!
