Tumbling EUR/GBP – Is It Oversold Enough To Pull Back?
Arslan Butt • 1 min read
Just an hour ago, my colleague Skerdian shared forecast about European Inflation. Finally, the CPI is out and exactly as he forecasted. However, we still have a buying opportunity in EUR/GBP. Are you up for it?
CPI Flash Estimate y/y – Couple of minutes before, Eurostat released the annual inflation is expected to be 1.5% in the November 2017. It's greater than 1.4% in October 2017. Yet, the traders seem dissatisfied as they were expecting a 1.6% rise.
For sure, this is going to hurt the sentiment that ECB's will halt asset purchase program soon. Let's keep in mind, it's just an early estimate and not the actual figure. So, we can expect anything in future.
Is It Worth Trading EUR/GBP?
My answer is Yes. The technical side of the pair is sparing a good long-term opportunity.
Let's look at the daily chart of EUR/GBP, the pair is about to form a fourth bottom at 0.8750. In the past, the pair failed to break this level and reversed back. So, is history going to repeat itself? Well, odds are high, but we also need to keep a Plan B.
EURGBP – Daily Chart
Plan A is to take a buy position above 0.87500 with a stop below 0.8700 with a target of 0.8850. Whereas, Plan B is the cut and reverse strategy. I will be looking to sell the EUR/GBP below 0.8700 for the target of 0.86500. Good luck and keep following for more exciting trade ideas.