Daily consolidation onto 61.8% Fibonacci is signaling a possible base for EUR/GBP to commence its secondary bullish impulse.
EUR/GBP failure to hold the 50 EMA on the 1-hour time frame may force a bearish push down to key round number 0.9000. At this level it is crucial to look for bullish candle reversals.
- Daily – support at 61.8% of impulse range (September low to September high)
- Daily – Touches lower Bollinger band
- Daily – Above 200 EMA
- 1 Hour – Reclaim 50 EMA but must hold
- Caution – Below 200 EMA
- RSI crossing mid-point
- IF: Fails to hold above 50 EMA and bearish momentum continues, expect support at 0.9000
Support – 50 EMA, 0.90450, 0.9000
Resistance – 200 EMA, 0.91000, 0.91200
Optimal entry provides the greatest reward to risk ratio while supporting entry is a zone for reversal signals.
Optimal Entry – 0.90450
Supporting Entry – 0.90550
Candle Reversals for entry
- Bullish Hammer
- Bullish Engulfing
- Bullish Piercing
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 below 0.90273 – 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 0.90450 – Target 1 0.91000 = 2.5x Reward to Risk
Optimal Entry 0.90450 – Target 2 0.91200 = 3.5x Reward to Risk
Supporting Entry 0.90550 – Target 1 0.91000 = 1.5x Reward to Risk
Supporting Entry 0.90550 – Target 2 0.91200 = 2.3x Reward to Risk