Shorting the Retrace Up on EUR/GBP

EUR/GBP has retraced higher today, but the retrace might be over already

Skerdian Meta•Monday, December 28, 2020•1 min read

The EUR/GBP was trading on a bearish trend during September and October, as the GBP was climbing higher on positive Brexit news/rumours. However, the first two weeks of December were quite bullish for this pair, as the Euro picked up additional strength after the EUR/USD broke above 1.20.

The 100 SMA seems to be turning into resistance again on the H4 chart, for the EUR/GBP

The EUR/GBP climbed from 0.8870s to 0.9230, by the middle of this month. The price retreated down from up there, pushing below 0.90 for a moment, but the 200 SMA (purple) held as support on the H4 chart, and this pair bounced off that moving average.

But, buyers gave up at the previous highs again, and last week we saw the EUR/GBP turn bearish, breaking below the 200 SMA for about a day. Today, we are seeing a bullish move here, but the move seems weak, and it might have already run its course. The 50 SMA (yellow) and the 100 SMA (green) are providing resistance on the H4 chart, while on the H1 chart, this retrace is already overbought. So, we decided to open a sell forex signal on this pair, hoping that the price will reverse back down soon.

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ABOUT THE AUTHOR See More

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.