EUR/GBP: Eye Locked on .8500 – Trade Cancelled

Trade Cancelled: 2013-01-29 02:53

EUR/GBP Chart

This is why you gotta respect those economic releases and not simply base your trades off technical setups!

As I mentioned last week, I decided to wait for the U.K. GDP release before deciding whether or not I was gonna go short. As it turns out, this was a solid decision, as GDP figures came in much worse than expected, showing a contraction of 0.3%, after early estimates were calling for a -0.1% figure.

This helped trigger some pound weakness, allowing other higher-yielding currencies like the euro to edge higher. Of course, the .8500 didn’t hold and price surged right through it!

Phew! Dodged a bullet on that one!

It’s time to move on from this setup and start looking for new ones! Good luck trading this week, homies!

Trade Idea: 2013-01-24 01:45

EUR/GBP Chart

I’ll get straight to the point – I’ve got my eye locked on the .8500 handle on EUR/GBP but I’m not quite ready to set orders.

Why .8500?

  1. It was a solid support and resistance level in the past.
  2. It’s a nice round number.
  3. It’s right smack in the middle of the 50% and 61.8% Fib.
  4. It’s one full weekly ATR away from the week open.
With that said, it seems like a prime spot to short EUR/GBP, which I believe has been on an over-extended rally.

Why am I not ready to set orders just yet?

In a nutshell, there’s just too much event risk involved. The U.K. GDP is set for release tomorrow and I think it could serve as a catalyst for a sharp move. Since I don’t want to subject myself to that kind of uncertainty, I’ll wait until after the report is released before I commit to anything.

So for now, it’s wait-and-see for me! What do you think of this setup? Is this something you would take? Let me know in the comment box below!


  • talh7

    I’m looking at the 0.8400 as a resistance area as well and look to take it short because on a daily chart the pair stop around this area for the last 4 days and RSI, STOCH are at a overbought area and the MACD histogram is sloping down.

  • Reza Fahlevi

    nice setup

  • cyclopip

    Just a heads up: this trade was a no go! Didn’t like the candlesticks that formed after the UK GDP report. Will give y’all a full update tomorrow! 😉