EURGBP—rallying

I did re-enter with two long positions—one from .8582 and one from .8638. I just took partial profits on the first one at +96 pips. My price target is the same as before of .8732/46. This is fib confluence as well as the target for a pennant that formed on the daily chart. If the pair clearly closes above that then it's possible the psychological .9000 is next but it will battle tough resistance getting there.

It's easy to see why I re-entered. On the three hour chart the price dropped only to .8562, forming a nice hammer at polarity.

That said, I would not be surprised to see a bigger pullback, perhaps to the uptrend line at .8521. The candles on the three-hour chart are tentative at best. There's negative divergence with RSI. Prior key resistance was .8531. There's additional support at .8463 down to .8393/44. Below that things look rather grim. Let us remember there's a higher level overall downtrend in place.

Here's the three-hour 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.

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