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EUR/GBP May Face Support After The Weekend.

Last updated 2/27/2009 7:17 PM EST (GMT -5) 0 Comments - Add your comment

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Bradley W. Gareiss

Technical Analyst, GFT

The EUR/GBP has been subject of two longer term trades that we have looked up in the past, but the pair is now consolidating like many other currencies.  This consolidation has led to a bullish Gartley forming on the 1hr Chart.  There is also a bullish trend line on the Daily Chart that provides additional support.  

We are looking to buy the EUR/GBP if it falls to point D (0.8826).  Point D is located at the convergence of the following points:

The bullish Gartley is near completion and may hit our entry soon after the open on Sunday night.  However, we must be very cautious if the market gaps down on the open.  If the pair gaps to a point near the entry, we will invalidate the trade.  The size of the gap is subjective based on how big the gap is, if the gap closes, how quickly the gap closes, or how quickly the pair continues to drop.  If you are in doubt, simply stay out of the trade.  Also, if the pair rallies above 0.8900, the trade is invalid and should not be entered.

To recap, we will look to buy the EUR/GBP at 0.8826 with our stop placed at 0.8795.  Our initial profit targets are 0.8864 (38.2% of CD) and 0.8895 (61.8% of CD). 

Daily Chart - Bearish trend line may provide support.	1hr Chart - Bullish Gartley; buy @ 0.8826.

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