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eur/gbp update.

01/05/2011

I like the eurgbp much better than the gbp right now for trading. This graph shows a stronger pound against the euro. Taking a big step back, we have been in a downtrend since 1-1-09. (on the other hand, this could be one huge bull flag, but lets not over think things too much)

On the daily, we’ve been trading a pretty big wedge since June 2010 having failed to make significant lower lows or higher highs. We have also broken below the 200 day sma, (and we’re waiting to see a close down there)

I believe a test of the illustrated rising trendchannel, followed by the recent lows is in order later this week or next.

On the 4 hr chart, we had a great short entry (which I highlighted on twitter) at a double top on the 50% retracement of the move from Oct to Dec last year. We confirmed short with a break of the minor trendline of the recent corrective move long.

We are currently sitting between a 50% and 618 retracement of the most recent long move. (not shown on my chart) So, a bounce here before continuing the the short move is not out of the question. (I would not short lows in other words)

Personally, I’m looking for bounces into the moving averages on the 15 minute charts. If I take a good trade (or a bad one) tonight I’ll post it in the “trades” section of the blog. That’s it for tonight. Trade safe.

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