Sophia Todorova has a background in teaching and psychology, and as such relishes the idea of assisting new traders on their journey to Forex trading success. Technical Analysis is her passion. The charts speak, and she listens.
Eurgbp had been trading in a weekly range for an extended period, and was only recently breached back in March of this year. It has started showing some bottoming action at the weekly trendline following the pullback to retest the breakout level at .8610. The weekly trendline also converges with major previous lows (indicated by horizontal line on chart below).
The 4-hour chart shows a strong bounce off of the support, and although it has yet to breach the shelf of resistance at .8670s, the hourly chart shows a series of higher lows up until closing time on Friday. Two main factors lead be to believe that this could be a golden trading opportunity: (a) Length of time spent ranging often indicates how significant a breakout will be; (b) the breakout and retest is happening at major weekly support.
I went long on Friday at the current level, and if my analysis turns out to be correct, and the pair follows through with a breach of .8670, and also the down-sloping trendline on the 4-hour, I will be adding to my longs. .8830 resistance is a potential target area, followed by the daily highs at .9040. There is also a major weekly resistance point at .9120. I will attempt to let my longs run as long as I can until another bearish reversal sets up on the 4-hour chart.
Thanks for reading, and have a lovely weekend!
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When trading always use a stop loss and calculate the proper risk management for your account. This analysis aims at providing assistance to the forex trading community here at Winners Edge Trading, thereby helping them to make informed trading decisions.
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