Trade Update: EUR/GBP Trend Line Pullback

My second entry order just got triggered! Do you think I should hold on to this EUR/GBP long position ahead of today’s U.K. jobs release? If you’re wondering what I’m talking about, make sure you take a look at my initial trade idea first.

Price is currently testing the channel supportĀ around the 50% Fibonacci retracement level, former resistance at the .7900 handle, and bottom WATR. I’m also seeing a bullish divergence, as the pair formed higher lows while stochastic drew lower lows.

EUR/GBP 4-hour Forex Chart

EUR/GBP 4-hour Forex Chart

As Forex Gump mentioned in his U.K. employment trading guide, a smaller decline in joblessness is expected for March while the jobless rate and average earnings index could stay unchanged. Weaker than expected readings might even highlight how the U.K. economy is in a shaky spot ahead of a potential Brexit, possibly triggering a strong bounce for EUR/GBP. I’ll also be on the lookout for the U.K. retail sales report due tomorrow since a 0.1% drop in consumer spending is eyed.

I’ll probably make some adjustments to this trade ahead of the ECB interest rate statement on Thursday, though, as central bank officials have been expressing their dovish views recently. Still, data from the euro zone hasn’t been all that bad, as the German ZEW economic sentiment index surged from 4.3 to 11.2 to indicate a rise in optimism.

For now, I’ve got my stop at .7775, just below the channel support, 61.8% Fib, and .7800 major psychological level. I’ll aim for the swing high near .8175 for my initial profit target but I’m open to pressing my advantage if the U.K. reports turn out my trade’s favor.

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