After doing top down analysis on FX:EURGBP , I have couple of key ideas that I would like to share with you guys. First of all we can see a clear (purple in color) formed on the 4 hour chart. Do notice the 2 false breakouts that we got in that channel. I only consider any level being broken only when we get a valid retest after the breakout. In our case, only after 2 false breakouts did we get a valid retest of the channel in the form of a . Currently we have broken the and now we only need to wait for the 4 hour candle to close before shorting this pair. The primary target for the has been labelled on the chart above. The stops will go above the top portion of the (the line which was tested by the ).
Secondly, if the market is able to come all the way back to the bottom of the , than we could also potentially have another opportunity to add onto our previously short position from the . So, if we get a breakout to the downside in the channel, than we can look to short again at the retest of the broken level (marked by red dashed arrows).
After all targets being reached, if you still have any short positions open, than you could probably hold it till we get down to the 0.69862 level, which is a strong MONTHLY . If we switch over to the , we see a clear formed right at the falling , which was drawn by connecting August 2013 and March 2014 highs. This has proven to be valid after the market was strongly reject from it in November & December months of 2014 as well as recently in October of 2015. See the charts posted after this description for more clarification.
Lastly, we are also seeing strong divergence on the as well, which just adds on to our overall view on this pair.
Please feel free to AGREE or DISAGREE with this idea by leaving a comment below. Hit that thumbs up button (top left corner of this chart) if you like the idea. Thank you everyone for all the SUPPORT that you have given me so far, I truly appreciate it. Good luck everyone :)
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Illustration of formed at daily trend line:
Illustration of daily importance:
Illustration of valid pattern: