Hi guys, welcome to this Blueberry Markets video update with me, John Kibbler, Head Currency Analyst.
Practice trading with a demo account
In this video, we will look at the potential EUR/GBP shorting opportunity as the price is in this nice downtrend.
As we know, the trend is our friend. We’re looking for those trend trading opportunities constantly and consistently. And what we can see, here, from this daily timeframe is that the price came up and hit this level of resistance here. The market then pushed down to the downside, came, and retested this support level, here. You can see a nice decent support level through there. The market then popped up out of it then broke right through it and closed bearish yesterday. That was intriguing to have a little look at.
As soon as I saw that daily bearish close. I want to look at the four-hour timeframe. On the four-hour timeframe, we can see that the price is making lower lows and lower highs. I’m looking for the potential of the markets to find some resistance, here, and continue to push lower.
Suppose, we take a look at what happened through here. We can see how the 15-minute reacted, and this is what we’ve been talking about for a while. It has that trend match up on the lower timeframe. You can see that the price came back up into that four-hour level of structure and formed a double top pattern, breaking through the neckline, closing below the neckline, and then the market is falling away like that.
I’m looking for something similar. I’m looking for the market to retest this area of a structure, which it has, and form a pattern. So, something like when we looked at EUR/JPY, for instance. We looked for the markets to either form a double-top pattern. We’ve got either a head and shoulders pattern where the market would form something like this or we’ve got the natural change in cycle pattern, which would look something like this. And then, we’d look to trade the retest or the breakout either way.
Looking at these three types of patterns on the lower timeframe at this area of resistance now. If we look up here, the market gave us a nice change in cycle pattern or double top pattern where we could get a nice break to the downside. If the market comes up, retest structure highs then breaks-through, that’s a nice area to start looking for short opportunities.
But once again, EUR/GBP is in this area of resistance. Could it start pushing back to the downside? Have a little look for that change in cycle, which will give you a little bit more of a bias to the downside here on this market.
Thanks for watching this video update. If you liked it, please give it a thumbs up. If you want to see any different charts, please drop a comment below, and I’ll make sure I’ll cover it. Thanks.
We hope our Forex Chart Of The Day analysis helps you in your trades. Practice trading the EUR/GBP pair with free $50,000 when you sign up for a free demo account at Blueberry Markets.