EUR/GBP - What a great pair to trade!

Here is my view

Below some info which may give direction over the next few weeks for EUR/GBP:

EUR Shorts Plunge, As CHF Goes Net Long For Only Fourth Time In 2010, JPY At Most Bullish

The CFTC reports that in the week ended July 13, speculative EUR net positions dropped once again, this time to -27k, the lowest since mid-January, and the fastest plunge every recorded since the all time biggest net short position recorded in May. In other non-EUR pairs, net spec positions in the Yen spiked to a 2010 high at 47k, while the CHF posted its first net bullish spec exposure since January at 15k. Lastly, the decline in GBP bearishness continues dropping to the lowest since January at 35k positions. Obviously, the speculators are aggressively betting against the dollar and in favor of other crosses. Then again, with even Goldman joining the EURUSD bull crowd, we are now fairly certain the bullish trade is heavy.

(Source: zerohedge)

Interesting, Merc. Might be time to short EUR/GBP!

Seriously, though, we have reached an important figure - .8500 and I would expect some retracement here or at least some consolidation. Cable has reached a support level and the Euro is hovering at 1.3 with everyone waiting for the signal to short.

I am waiting to short GBP/CHF - approximate inverse of EUR/GBP which is just getting jammed under 1.6

Hello Smikester & Merc

I have long E-G @ 14:00 today... a late entry I think.

Agreed! Might be the consolidation is coming this week before heading up, based on the chart. Let's see.

tpat

Thanks for posting the chart. Could be a good long. Expect a retrace to that trend line? Could be 60 pips or more. If it does it will probably close out my precious longs. What a frustrating game this can be.

Good morning Smikester and tradpat

Here is what I see in the bigger picture: Possibly more upside into .618 confluence, drawn from the last two highs on the daily chart. A look at the chart pattern in terms of symmetry also suggest more upside to me., to .8650 - poss. .8780.

(I sent a chart as attchment, as I still have not figured how to post them, can someone please tell me if it has worked. I am unable to open it)

However, my caveat is the shenanigans of central banks in Europe, the Fed buying Euros etc, all of which can skew the longer term technicals IMO. Cable tanking this morning for no apparent reason by 50 pips is a case in point.

As we are coming into the quiet holiday period I feel one needs to proceed with caution. To me the 15 min time frame offers the best risj/rewards.

( I did not take a long signal this morning, as I did not like the extended flat since last night. Of course the break out was fast and furious in line with the cable move. Great for anyone who caught it though)



Merc

The daily chart shows a bearish reversal bar which means a return to the down trend:




And the hourly shows the strangest head and shoulders (complete with ears!):

[quote=smikester;3888581]

And the hourly shows the strangest head and shoulders (complete with ears!)

Hi Merc

I read your comment with interest.
Looking at your chart (.bmp) you are good!

P.S. I think you can change the extension.bmp to .jpg so that the chart can be displayed/seen like others.

tpat

Hi smikester

I closed E-G with a loss $18 yesterday.
Now waiting for today's candle to go down(trend).
I think what you meant the "bearish reversal bar" is tweezer.
The image and link are here >
http://www.forexfactory.com/showpost...9&postcount=16

Cheers
tpat

I agree it is interesting pair and gives good correlation of movement for EURUSD if analysed in conjunction with GBPUSD. I will add this to my charts for analysis on EURUSD

Hi Merc. Where do you see support for the possible up trend continuation? I wasn't surprised that we bounced off .8380 - .8385 which I have as weekly levels, but I would expect a retest of .8430 before we continue down.

I think you made an important point re bank stress tests, but from what I have been hearing, most will pass because governments want them to - without addressing the fundamental problems.

Was that chart off a phone? If you could post a chart with more detail that would be helpful.

Hi Tradpat and thanks for that link. I'm not so familiar with term tweezers although I have heard it, but a two day pin bar, or two bar high, lower close. All amounts to the same thing. Hoping Merc can enlighten us because if this closes above .8430 I'll have to ditch my shorts.

slighty longer term look at EG on daily chart. I allways keep an eye on daily chart but mainly trade 15m for day trading.

Mike.... don't take tha cat off the bag... that's the classical "batman" pattern...



Cheers!

Hi Tradpat,

Thanks, I will look into this conversion. For now just posting another hourly. As attachment until I figure out a way to convert.

This morning I don’t like it either way here as it is between weekly/daily pivots and needs a break above .8423, or below .8407, or better still a break below the recent low at .8396 for direction . depending on clarity of signal at the time, so sitting on the sidelines for now. I have attached an hourly view to show what I see..

Merc

Looks like the week could finish with a bearish pin bar. Could be a bumpy ride down, though. Lots of levels to break. Have a great weekend everyone.

.8315 is looking like a good level to be short from. Might add to my shorts if we get a good looking hourly close below there...

Smikester, could be, there is a large H & S pattern on the 4 hourly forming with the right shoulder in progress. Your proposed short entry would be the break of the neckline as I see it.

Merc.