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With the ECB statement coming up and traders expecting to hear confirmation on when their QE might end, I’m eyeing a long euro play on this pair.

Long EUR/GBP Idea

On the daily time frame of EUR/GBP, the pair appears to be slowly attempting an upside break from the long-term descending channel. If completed, a reversal from the downtrend could be underway.

EUR/GBP Daily Forex Chart
EUR/GBP Daily Forex Chart

The upcoming ECB decision could be a strong catalyst to sustain an upside break since Draghi and his fellow policymakers might provide more clues on when tightening might start. If they do confirm that we’ll see the last of bond purchases by September, the euro could be in for more gains.

In contrast, the pound may have narrowly escaped a sharp drop on the Brexit “meaningful vote” but it ain’t out of the woods just yet. More debates are lined up and there’s still plenty of room for drama among the houses of parliament in the coming days.

Zooming in to the short-term chart gives me a better picture of where I could set my entries and exits:

EUR/GBP 1-hour Forex Chart
EUR/GBP 1-hour Forex Chart

In particular, I’m waiting for an upside break past the .8835 resistance but I’d probably wait for things to settle down before jumping in. After all, the shared currency has already been rising across the board in anticipation for the announcement, so there’s a good chance for disappointment or profit-taking afterwards.

As for my stop, I’ll set it below the short-term range support at .8725. For my target, I’m setting my sights on the .9000 to .9025 level which has previously held as resistance.

What do you fellas think?

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