Day trade
Trade view / 04 August 2016 at 8:08 GMT

Charts suggest losses in EURGBP to deepen

Analyst / PIA First
United Kingdom

A big day for the GBP with the rate decision and minutes seen at 1100 GMT. EURGBP charts would suggest that we are in for a relief rally in GBP and here is why:

The monthly chart clearly highlights the cross breaking out from the downward trending corrective channel. The impulsive move up from the 2015 lows would suggests that the bias will remain bullish over the long-term. 0.8125 has been pivotal and, being close to the reverse trend line support, is our first support barrier. 

Longterm GBP chart (click to enlarge):

Source: Saxo Bank. Create your own charts with Saxo Trader click here to learn more

However, it is not until we place a trend channel on the current price action that highlights a possible right shoulder of a bullish reverse head and shoulders lining up at 0.7500. 

This is our second medium-term support. This more aggressive correction to the downside will hopefully come clear in lower timeframes. 

Source: Saxo Bank

The weekly chart highlights a bullish Elliott wave-five count now complete. This would suggest that we are now in the corrective formation lower (AB=CD correction). 

Expect trading to be mixed and volatile. 

 Source: Saxo Bank

Using a Fibonacci retracement tool, we can see that the 61.8% pullback level comes in at 0.7577, close to the aforementioned support at 0.7500.  

Source: Saxo Bank

Daily chart - A bearish Outside Bar on Tuesday would also suggest that the CD leg (of a more complex and volatile sequence) is now underway. AB=CD would take us to 0.8106. We have bespoke support at 0.8162 and will be our first target over the short term. 

Source: Saxo Bank 

So to reiterate, we are temporary bears in EURGBP. The 0.8165-25 target area should be seen over the next two weeks with a possible corrective move down towards 0.7600 before year-end when we expect that upward bias to re-emerge. 

Management and risk description


Entry: selling a break of 0.8340.

Stop: 0.8380.

Target: 0.8165 .

Time horizon: within 10 trading days.

— Edited by Clemens Bomsdorf

Non-independent investment research disclaimer applies. Read more


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail