EUR/GBP has been bearish for several months, since it reversed down back in August. Since then, the pressure has been on the downside completely and the 100 SMA (green) has been doing a great job in providing resistance during pullbacks higher on the H4 chart, reversing the price and pushing the trend down.

Yesterday we saw another jump higher in the afternoon, before the results from the UK elections started to come out. But, the Conservatives won by a comfortable margin which calmed down some of the nerves and removed part of the uncertainty, meaning that the UK is definitely leaving the EU soon.

The retrace seems complete on the H1 chart

As a result, the GBP surged several cents higher, while EUR/GBP returned down and resumed the bearish trend again, falling more than 200 pips lower. Although, we are seeing a retrace higher on the H1 chart. But now, the retrace is complete on this time-frame and the previous candlestick closed as a doji, which is a reversing signal. So, we decided to take this opportunity and go short on EUR/GBP, following the main trend.