EUR/GBP two bar reversal signal at 61.8% Fibonacci
EUR/GBP holding demand zone and tightening through the compression wedge on the daily.
Strong candle continuation after two bar reversal, must wait for a retracement back into the optimal entry. If price stays bullish, chasing is not desired. We could see a small flag pattern form on the 15-minute time frame for EUR/GBP continuation to targets 1 and 2.
- Daily – Volume dropping off in past 3 consecutive lower low candles
- Daily – 61.8% Fibonacci holding price
- Daily – Possible bullish hammer in progress
- 1 – Hour – two bar reversal candles
- RSI challenging 50 mid-point
- Volume increasing
- Candle pull back to optimal entry is necessary for entry
Support – 0.90330, 0.90200
Resistance – 0.90790, 0.91000, 50 EMA, 200 EMA
Optimal entry provides the greatest reward to risk ratio while supporting entry is a zone for reversal signals.
Optimal Entry – 0.90330
Supporting Entry – 0.90380
Candle Reversals for entry
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 0.90109 – 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 0.90330 – Target 1 0.90790 = 2x Reward to Risk
Optimal Entry 0.90330 – Target 2 0.91000 = 3x Reward to Risk
Supporting Entry 0.90380 – Target 1 0.90790 = 1.5x Reward to Risk
Supporting Entry 0.90380 – Target 2 0.91000 = 2.5x Reward to Risk