EURGBP—a tantalizing level

EURGBP has now laboriously climbed to a high of .8380. It's a tantalizing level to go short—it's good resistance, one could have a tight stop, etc. The pair is hesitating, no doubt because sellers are piling in. I'm considering shorting but will base a decision on how momentum acts over the next hour or so. If EURGBP does clear .8400/20 then there's not much stopping it until .8500 or so where it bumps into a downward trend line on the weekly chart.

It's difficult to believe that such a robust downtrend can end so easily. In fact, a look at the daily chart shows it's not likely—the ascent of the uptrend since the low is too steep to be maintained. This is more than likely corrective and the pair will probably reverse soon. But I'm not trading it until I see more evidence that this has happened.

Resistance is at.8382/.8420, .8519 and .8594.
Support is at .8320/10, .8265, .8218, .8180, .8107/00, .8068, .8000 and .7900.

Here's the daily chart:












© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.