Cementing GBP in the Foreign Exchange Market

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EURGBP Technical Analysis

We initially thought to wait for the weekly close that may reaffirm the technical structure we have been monitoring but we believe the Bank of England (BOE) monetary policy tomorrow may be the fundamental trigger for pattern we have discovered in the weekly chart.

EURGBP Weekly Chart

Please click on the chart to enlarge:

EURGBP Weekly Chart 04/11/15

EURGBP Weekly Chart 04/11/15

EURGBP Trading Strategy

On Thursday the Bank of England (BOE) its monetary policy, quarterly inflation report, official bank rates and the bank rates votes at 12:00pm GMT. Due to the concentrated amount of data we believe this may be the trigger for heavy selling across GBP pairs and crosses that we have noted on Tuesday but chose not to act.

The weekly chart signals the potential for reversed Head-And-Shoulders (H&S) where the recent dip is within a close proximity to the weekly support. As the weekly session will only end on Friday’s close the price may trade below the support before closing higher but it is a risk we are willing to take. What may also serve us are traders cutting their long exposure to GBP that may force EURGBP to correct higher. A classic whipsaw reaction may be seen, which is why we are heavily relying on EURGBP corrective gains that will provide us with some distance from the market.

We cannot use a tighter stop as this is a weekly entry and we wish to defend ourselves from a possible ‘whipsaw.’ If EURGBP will correct higher before the economic data is published we will modify the stop.

EURGBP Trade Alert Details

EURGBP long at market price (0.7058)
Take profit: 0.7394
Protective stop: 0.6964
Risk Ratio: 1 : 3 (approx.)
Estimated duration: 14 days

05/11/15 UPDATE:  EURGBP is trading at 0.7102 at the time of this writing.

Please click on the chart to enlarge:

EURGBP Weekly Chart 05/11/15

EURGBP Weekly Chart 05/11/15

We are closing 30% of the long trade ahead of BOE Carney press conference and shift the protective stop to the entry.

05/11/15 UPDATE II: EURGBP is trading at 0.7125 at the time of this writing. We are closing 10% of the long trade at market price. We are quite aggressive as the NFP is due tomorrow.

05/11/15 UPDATE III: EURGBP is trading at 0.7140 at the time of this writing.

Please click on the chart to enlarge:

EURGBP Weekly Chart II 05/11/15

EURGBP Weekly Chart II 05/11/15

We are closing 10% of the long trade at market price and shift the protective stop to 0.7070.

05/11/15 UPDATE IV: EURGBP is trading at 0.7153 at the time of this writing.

Please click on the chart to enlarge:

EURGBP Weekly Chart III 05/11/15

EURGBP Weekly Chart III 05/11/15

We are closing 10% of the long trade at market price and shift the protective stop to 0.7075.

06/11/15 UPDATE: EURGBP is trading at 0.7187 at the time of this writing.

Please click on the chart to enlarge:

EURGBP Weekly Chart 06/11/15

EURGBP Weekly Chart 06/11/15

We are closing 10% of the long trade at market price and shift the protective stop to 0.7105 ahead of the Non Farm Payrolls.

09/11/15 UPDATE: EURGBP is trading at 0.7110 at the time of this writing. We noticed a reversed H&S is building on the 4hr chart. We are giving the pattern the benefit of the doubt and lower the protective stop to 0.7099, which is -6 pips from the current location of the protective stop.

10/11/15 UPDATE: Our EURGBP long trade has ended as the market triggered the protective stop order that was shifted above the entry and finished the trade with a decent profit.

Cementing GBP in the Foreign Exchange Market
As EURGBP long trade is closed this page can now be accessed by all traders. Open trades are restricted to members only. We have been providing trade alerts in the Forex market since May 2014.
Cementing GBP in the Foreign Exchange Market

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Cementing GBP in the Foreign Exchange Market

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Cementing GBP in the Foreign Exchange Market