Euro May Be Forming Top vs. British Pound

March 21
17:06 2016

To receive Ilya’s analysis directly via email, please SIGN UP HERE

The Euro may be forming a top against the British Pound, with prices carving out a bearish Head and Shoulders chart formation below the 0.80 figure. The setup follows a corrective advance that itself was the culmination of a longer-term H&S bottom carved out between March 2015 and January 2016. A break of rising trend line support guiding the near-term upswing from November 2015 and a subsequent hold of this barrier on a retest as resistance suggest the next leg of the mult-year EUR/GBP down move established from late 2008 may be in progress already. To be fully confirmed, the H&S top requires a daily close below neckline support at 0.7705, the 23.6% Fibonacci retracement.

I will begin to build short exposure with a small position within and current trading range and look to grow the trade once the H&S pattern is confirmed. To meet acceptable risk/reward parameters, an entry order has been set to enter short at 0.7854. If triggered, the trade will initially target 0.7705. A stop-loss has been set to activate on a daily close above 0.7928, the February 25 high. I will take profit on half of the position once prices touch the first objective and wait for a daily close below it to consider increasing size.

How does this trade fit in with my 2016 forecast? Find out here!

Euro May Be Forming Top vs. British Pound

Related Articles