EUR/GBP breaks 3 month trend line

3 thg 3, 2016

The EUR/GBP breaks 3 months trend line, hints downtrend - Short position.
EUR/GBP moved lower, breaking the rising trend line support set from November 2015.
The short term trend is in a downtrend technically indicated by following:

• Price is currently trading below the valid downtrend line
• RSI- Negative Divergence, Bearish momentum
• Bearish candlestick pattern- Evening Star at the top

The downtrend is confirmed by the bearish cross of MA10 below MA20.
Prices are trading close the support level (S1) the 23.6% Fib at 0.7710.

Therefore, we will recommend SHORT POSITIONS for the no position holders on EUR/GBP in case of daily close below the 0.7710. Take profit at 0.7570 the 38.2% Fib level and take profit2 at 0.7460 the 50% Fib. Stop loss should be a bit above the support level-S1, thus the stop loss is at 0.7780-0.7800.

For Short-holders we will recommend to hold their short positions and adopt the same stop loss and take profit orders as mentioned above.

For the long-position holders we will recommend them to enter LONG POSITIONS in case of reversal above the trend-line at 0.7830. Take profit at 0.7930 (R1) - February 24 high. Stop loss should be a bit below the trend-line, thus the stop loss is at the area of 0.7800.