The Euro recently found significant support off an underside trend-line dating back a year-ago (best seen on weekly chart). This helped blow some life into it as of Friday, but that upward momentum is stalling with a pair of semi-bearish reversal candles.
While EURUSD could turn down from here, a more optimal point of entry for shorts could come on a bit more strength as a couple of trend-lines run lower from last year. These lines also run near the 200-day, making the 11300/50 a potentially optimal spot from a risk/reward perspective to look for another swing lower to develop.
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EURUSD Weekly Chart (bottom/top-side lines)
EURUSD Daily Chart (200-day, weak tone/trend)
GBPUSD is forming a short-term pattern (4-hr chart), but watch out for longer-term support should the triangle formation trigger. There is still room to go before the bottom of the support zone is met at the October 2016 flash-crash low of 11905, but buyers could certainly show up sooner. However, this doesn’t mean a good trade can’t be had before, the key will be watching price action and signs of buyers coming in after a bearish break, if indeed a bearish break unfolds.
Symmetrical triangles can break to the top-side, in which case the pent-up pressure at support might help give it a lift should the top-side line of the pattern is breached. The bottom line is, wait for a break of the pattern before running with a trading bias.
GBPUSD Daily Chart (Long-term support down to 11905)
GBPUSD 4-hr Chart (Triangle nearing trigger point)
***Updates will be provided on these ideas and others in the trading/technical outlook webinars held at 930 GMT on Tuesday and Friday. If you are looking for ideas and feedback on how to improve your overall approach to trading, join me on Thursday each week for the Becoming a Better Trader webinar series.
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX