So much for that EUR/GBP area of interest! Price dropped all the way down to the bottom of the range, and I’m worried support might break.
Long EUR/GBP Idea
I thought the pair already had enough bullish momentum after bouncing off the area of interest around the middle of its range. I hopped in a long position at market then, initially aiming for the range resistance around .9015.
However, rumors of a Brexit deal between the EU and the U.K. led to a sharp pound rally late last week, taking EUR/GBP all the way down to support at .8775. Although British government officials denied it and reports indicated that the speculations were unfounded, pound bulls kept their hopes up.
With that, I’m worried that the floor might break, especially if we do hear of positive developments in the Brexit-related events this week. The EU is set to announce its Brexit assessment soon but issues surrounding the Irish border are still being debated.It also didn’t help that euro zone reports weren’t all that impressive last week, with the flash CPI readings falling short of estimates and consumer spending in its top economies taking a hit.
U.K. PMI readings are lined up for the rest of the week and upbeat results could remind traders of the economy’s resilience, which might lift the pound further.
Because of that, I just decided to cut my losses on this long EUR/GBP position by closing early on a quick bounce off the range support. Here’s what I ended up with:
P/L: -105 pips / -0.26%
In hindsight, I probably shouldn’t have jumped in at market when my limit order at .8875 wasn’t triggered. This would’ve given me a chance to cancel those orders when Brexit deal rumors broke out. Bah!
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