Bearish Evening Star to drive EURGBP lower
Following the previous week's indecisive price action after making a new three-year high, profit taking was attracted to EURGBP last week. The result was the first decline in six weeks, a break through the 13-day moving average and, most importantly, the formation of a Bearish Evening Star pattern on weekly charts.
Although the downside stalled at a 62% correction point to August’s rise, the negative formation is expected to dictate sentiment in the coming days. It's worth noting similar, mirrored, patterns in GBPCHF & GBPJPY.
Management and risk description
A move to 0.8469 would mean the stop could be lowered to break even or better.
Entry: sell in 0.8550/55 area and any rally to 0.8594.
Stop: 0.8668 bid.
Target: 0.8469 and 0.8427.
Time horizon: this week, ending Friday 1pm London time.
Bearish Evening Star
— Edited by Martin O'Rourke
Non-independent investment research disclaimer applies. Read more