EUR/GBP Sell Trade Idea – June 17th 2020

Overall EUR weakness might start pulling EUR/GBP down, which should be a short to the medium-term price drop. Current rejection of the Fibonacci resistance as well as Moving Averages just confirms bearish domination.

Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.

This analysis was done on MetaTrader 4.

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Trade Idea Details:

EUR/GBP symbol

Type: Bearish

Key support levels: 0.8937, 0.8910

Key resistance levels: 0.8965, 0.8990

Price Action:

On the 1-hour chart EUR/GBP continues to trade within the descending channel. In fact, the upper trendline of the channel has been rejected on June 11, suggesting further price weakness. Currently, EUR/GBP started to print lower lows and lower highs and broke below the 50 Simple and Exponential Moving Averages. After the breakout rice corrected up and rejected the downtrend trendline.

Fibonacci applied to the first corrective wave up, after breaking below Moving Averages, shows, that 88.6% Fibonacci retracement levels were rejected cleanly, along with the 50 SMA and EMA. Perhaps this was the ideal selling point for the bears which should eventually lead to the price drop

EURGBP Hourly Chart June 17th 2020

The downside target is seen at 0.8865, which is confirmed by two Fibonacci retracement levels. First being the 461.8% Fibs as per the hourly chart. The second is 88.6% Fibs apple to the last wave down, which occurred between 6 – 14 April.

EURGBP 4hourChart June 17th 2020

Potential Trade Idea: 

A strong supply zone is seen between 0.8955 – 0.8965 and it might be an ideal entry point for sellers. As per the Fibonacci levels on the Daily and Hourly charts, the downside target is seen at 0.8835. For this reason, in order to meet 1:2 Risk/Reward ratio, stop loss could be placed at 0.9025, which is just above the high, produced on June 15.

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Muhammad Awais

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