- August 9, 2019
- Posted by: Trading
- Category: Analysis
The Euro recently found significant support off an underside trend-line dating back a year-ago (best seen on weekly chart). This helped blow some life into it as of Friday, but that upward momentum is stalling with a pair of semi-bearish reversal candles.
While EURUSD could turn down from here, a more optimal point of entry for shorts could come on a bit more strength as a couple of trend-lines run lower from last year. These lines also run near the 200-day, making the 11300/50 a potentially optimal spot from a risk/reward perspective to look for another swing lower to develop.
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EURUSD Weekly Chart (bottom/top-side lines)
EURUSD Daily Chart (200-day, weak tone/trend)
GBPUSD is forming a short-term pattern (4-hr chart), but watch out for longer-term support should the triangle formation trigger. There is still room to go before the bottom of the support zone is met at the October 2016 flash-crash low of 11905, but buyers could certainly show up sooner. However, this doesn’t mean a good trade can’t be had before, the key will be watching price action and signs of buyers coming in after a bearish break, if indeed a bearish break unfolds.
Symmetrical triangles can break to the top-side, in which case the pent-up pressure at support might help give it a lift should the top-side line of the pattern is breached. The bottom line is, wait for a break of the pattern before running with a trading bias.
GBPUSD Daily Chart (Long-term support down to 11905)
GBPUSD 4-hr Chart (Triangle nearing trigger point)
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—Written by Paul Robinson, Market Analyst
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