Shorting EUR/GBP at the Previous Support

EUR/GBP has turned bearish this month and we are selling the retraces higher

Skerdian Meta•Thursday, January 28, 2021•1 min read

The retrace seems complete on the H4 chart

The EUR/GBP was slightly bullish during summer, then it traded sideways for several months, until the end of December, when the sellers starting gaining the advantage. Then the pressure switched to the downside and this pair starting making lower lows.

The area around 0.8865 acted as support for a long time, from May/June last year, keeping sellers in check, as the price bounced off that support zone many times. But last week that support zone was broken and sellers made some new lows.

Yesterday we saw this pair retrace higher, and we decided to open a sell forex signal at the previous support area, hoping that it would turn into resistance. Buyers pushed above the 50 SMA (yellow) for a while on the H4 chart, but the price pulled back below it, so that wasn’t a proper break. Now the retrace seems complete, as the stochastic shows, so the downtrend should resume again 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.