EUR/GBP hits the top of the watchlist as the pair bounces higher in a solid downtrend. Will it meet resistance and return to the downtrend?
EUR/GBP Fibonacci Resistance?
With a relatively light economic calendar this week, we’re looking at technicals as a potential catalyst for short-term trading opportunities. And today, EUR/GBP is looking might fine in that regard as the bears seem to be taking a breather from the recent swift move lower.
Broadly, Sterling is taking a hit on the session without an apparent direct catalyst, and the euro seems to be bouncing on broad risk-off sentiment and possibly on positive Sentix Investor confidence data. These aren’t really game changing factors to the longer-term trend at the moment, so the odds are that bears may look at this bounce as another short opportunity in EUR/GBP.
We’ll be in that camp short-term, and we’ll be watching out for a bearish reversal pattern to form somewhere between current levels up to the top of the Fibonnacci retracement area / falling ‘highs’ pattern. If we see that pattern and the themes of the U.K. reopening vs. Euro area lockdowns still in play, we’ll consider a short position for both swing and long-term potential.
What do you guys think? Is this bounce an opportunity to play the longer-term trend lower? Or do you see other factors that can weigh more than covid headlines on EUR/GBP?
Let me know in the comments below, and as always, remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t simply follow what I do.
This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.