EUR/GBP – Hanging Man Hints at a Move Lower

EUR/GBP (0.7626)

Points to consider in this Forex market:

• The euro’s recover stalls below the 0.77 pivot. The EUR/GBP has hit a fresh yearly high.
• Still waiting on a clear short euro sale signal to come along.
• Trade strategy: Stand aside

The EUR/GBP Forex market has inched higher over the last several days on risk aversion capital flows. Money is going into funding currencies like the euro. Right now this Forex market has stalled below 0.77. Before that, prices hit a fresh yearly high. There is now a hanging man candlestick trying to form on the below daily MT 4 chart. This could mean a move lower in this Forex market is now in the cards. This candlestick has yet to be confirmed.

Technical Analysis

Let’s first discuss today’s daily EUR/GBP technical analysis. There is near term support lining up at 0.7577. A daily close below this level challenges the next technical support barrier lining up at 0.7525. The alternative EUR/GBP technical analysis, should the euro recover again, notes technical resistance at 0.7661. A break above this technical barrier challenges the next technical resistance at 0.7730.

Trade Strategy

Now let’s discuss today’s EUR/GBP trade strategy. My long term euro outlook remains quite bearish. The fundamental outlook as well as the technical analysis confirm this sentiment. As such, any gains in this Forex market are seen as corrective. I will opt to stand aside, for now, until a short euro sale comes along. For today, I am flat in the EUR/GBP Forex market waiting on a bearish confirmation to enter my desired short euro sale. However the appearance of the hanging man candlestick has not been confirmed. Once this is confirmed I will look for a good level to enter my short sale.