The confirmation for this EUR/GBP continuation would be a solid close below the trend line, but for higher reward to risk ratios, candlestick reversals at the APEX are also desired.
Wedge patterns are generally a sign of trend continuation when broken to the downside, and when found within bearish momentum trends, can become quite potent. Clusters with other technical signals like Fibonacci and RSI help support the EUR/GBP idea.
- Caution – Price above the 200 EMA
- Caution – Price above the 50 EMA
- 50 % Fibonacci Resistance (September High to September Low Range)
- Confirmation – Cross of wedge trend line
- RSI could break trend and range simultaneously for momentum
Support – 50 EMA, 200 EMA, 0.90835, 0.90500
Resistance – 0.91900, 0.92150
Optimal entry provides the greatest reward to risk ratio while supporting entry is a zone for reversal signals.
Optimal Entry – 0.91865
Supporting Entry – 0.91765
Candle Reversals for entry
- Bearish Shooting Star
- Bearish Engulfing
- Bearish Dark Cloud Cover
As traders, it is your job to mitigate the risk and only trade structures that provide high probability and great reward to risk ratios.
If you are not comfortable with defined exit levels, experiment with Moving Averages to help set solid exit rules to protect your capital.
IF: Price breaks above level 0.92197– this would suggest the structure is not in our favour and would be wise to reduce exposure or close the trade until a solid signal gives us reasons to re-enter.
Reward / Reward Targets:
Optimal Entry 0.91865 – Target 1 0.90835 = 3x Reward to Risk
Optimal Entry 0.91865 – Target 2 0.90500 = 4x Reward to Risk
Supporting Entry 0.91765 – Target 1 0.90835 = 2x Reward to Risk
Supporting Entry 0.91765 – Target 2 0.90500 = 3x Reward to Risk