Getting Ready to Sell EUR/GBP - Forex News by FX Leaders

Getting Ready to Sell EUR/GBP

Posted Saturday, February 3, 2018 by
Skerdian Meta • 1 min read

The Hourly Chart

EUR/GBP has traded above 0.88 over the last several months. There has been the occasional break to the downside once in a while, but the price has returned back up. The main indicator that has kept the buyers in charge has been the 100 smooth moving average on the daily chart.

That moving average, however, broke on Monday of last week, as the GBP gained considerable pace on comments about a soft Brexit. Since then, this Forex pair has been on a steady bearish trend.

EUR/GBP has retraced higher over the last two days. We are now approaching the 100 SMA  once again on the daily chart, and it’s looking like a great opportunity to open a sell trade on this pair.

The moving average on the daily chart currently stands at 0.8808. The 0.88 level should be a big resistance level in itself, as it was support until this pair moved lower.

The 200 SMA looms above

 

The H1 Chart

Looking at the H1 chart, we can find another moving average around the 0.88 level. The 200 SMA (purple) stands up there, and is likely to add extra strength to this area. It has done so before, despite being pierced briefly a few times.

The stochastic indicator is already overbought

If you switch to the H4 chart, you can see that the stochastic indicator has reached overbought level, meaning that the retrace has almost concluded. Based on these three timerfame charts, I believe that a sell trade makes sense around these levels. I will, however, wait a bit longer to see if we can get a better price higher up, probably at 0.88.

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About the author

Skerdian Meta // Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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