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Strategic trade
Trade view / 06 October 2016 at 7:41 GMT

Euro crosses look primed for downside

Analyst / PIA First
United Kingdom
Background

All euro-based crosses look prime to turn which could see EURGBP lower against sand a possible corrective bounce in sterling and similar scenarios for EURCAD and EURJPY.

EURGBP 

Daily - Posted a Doji high at the trend of higher highs. I would like to say this is the right shoulder of a bearish Head and Shoulders, but that might be pushing the boundaries too far. A daily close below 0.8729 (today) and we would have an Evening Doji Star in place. 

EURGBP D
Source: Saxo Bank

Intraday (30 minutes) – The most important timeframe in this outlook. We have bespoke support lining up at all the Fibonacci projection levels and yesterday’s low. I am starting to build a short position (again!)

EURGBP 1
Source: Saxo Bank

Correlation – Interesting facts here:

1. EURUSD is in a descending triangle that has a bias to break lower
EURUSD D
Source: Saxo Bank

2. GBPUSD is very close to a large 78.6% pullback level at 1.2673 (from 1.0362-2.1161)
GBPUSD M
Source: Saxo Bank

Management and risk description

Parameters

Entry: short 1 unit at 0.8810 selling again on a break of 0.8770.

Stop: 0.8830.

Target: 0.8670.

Time horizon: 2-4 sessions.

EURJPY 

Intraday (Four-hours) – We have stalled close to the previous high and the 261.8% extension level of 116.08 (from 112.06-113.59). There is no clear indication (yet) that the rally is reversing.

We would expect trading to be more mixed and volatile in this cross and the move down to be limited to 114.50-114.15 area. This is the 50% pullback level of this last rally and bespoke support. We ‘may’ form a bullish revers Head and Shoulders at that point. We will have to wait and see. 

EURJPY 4
Source: Saxo Bank

EURCAD

Daily – We have a very disjointed five-wave count to the downside. This dictates that the next move should be lower after a correction. We have stalled at the 38.2% pullback level of 1.4896 (from 1.6100-1.4151) .

EURCAD
Source: Saxo Bank

Intraday (Four-hours) – Forming a bearish Head and shoulder pattern. A break of the neckline at 1.4635 and the measured move is 1.4330. The last move higher can be seen in three waves that should highlight a corrective pattern. Starting to build a short. 

EURCAD
 Source: Saxo Bank

Management and risk description

Parameters

Entry: short 1.4775 (market) selling again on a break of 1.4635.

Stop: 1.4900.

Target: 1.4330.

Time horizon: medium term 2-3 weeks.

— Edited by Martin O'Rourke

Non-independent investment research disclaimer applies. Read more
06 October
baxter444 baxter444
Thanks for the long-term chart for cable, really useful as brokers don't have charts going back 30 years
06 October
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
You are welcome Baxter .... all the charts I highlight are SaxoTrader
06 October
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
We have bespoke support in EURCAD at 1.4754. A break close below there should cause an impulse selloff
06 October
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
EURJPY breaking the overnight lows now
06 October
Bullionaire Bullionaire
EURGBP ????
06 October
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
I am being hammered again
06 October
Bullionaire Bullionaire
I have moved my stops to 0.8880 allowing a move of GBPUSD to 1.2600
06 October
AlexF AlexF
USDCHF cross 0.98 if we close above could be going to 0.99 with a strong NFP ?

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