Guest Commentary: Sentiment Guides EUR/GBP Triangles
* Euro Sterling has entered a new phase within the medium term uptrend that requires a different type of trading strategy.
* Because it is consolidating in what should prove to be a bullish triangle, we can use the 5 different sentiments in the SHIFT triangle with Fibonacci to time our trades with greater confidence.
* We have reduced longs and would be inclined to sell short term looking to buy a deeper 'Irritating' retracement.
* Euro Sterling likely remains in the relatively early stages of a bullish 84.45-87.15 triangle. This requires a different trading strategy to the previous aggressive uptrend but sentiment should prove a useful guide as it changes throughout the five stages and legs of the SHIFT triangle.
Following the sharp 3 legged 'Surprising' disappointment to 84.45 just beyond the 38.2% Euro Sterling recovered in a 'Hopeful' rally that failed at 8685 at 86% of the previous decline. It is now in the midst of an 'Irritating decline' that confirms the loss of volatility associated with more triangular consolidation and a deeper retracement through pivotal 8575 to 8480 the confluence of 86% and c=1.618a.
We have significantly reduced longs looking to rebuy this weakness against 8445 for more 'Frustrating' and then Tedious' price action before the eventual break up through 8715 to the 8835 target. A loss of 84.4 would suggest Euro Sterling is acting out a larger version of the first decline to as deep as 83.25.
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