EURGBP - Moving higher in an AB=CD formation

Ian Coleman FXStreet

Technical

Monthly: Since posting large nett losses in September 2017 (-395 pips) the cross has moved sideways. Price action on March (2018) has seen a bearish Outside Month posted and offers a mild downward bias. Dip buying has been seen in April. The RSI (Relative Strength Index) is close to 50 (mid-point) highlighting we are non-trending.

Weekly: Last week’s positive price action formed a bullish Outside Week, normally an indication of a change of trend. However, the rally was capped by the Ichimoku Cloud. An area to note to the downside is 0.8314 (bespoke support). This is close to the 261.8% extension level of 0.8301 (from 0.9299-0.8682) and the previous swing low 0.8297 (week 17th April 2017). Last week’s Marabuzo level (mid-point from open and close) is located at 0.8714.

Daily: The last two days have posted Inside Soldiers, a clear sign of investor indecision. We have posted a DeMark exhaustion 13 count from the base. The chart highlighting levels under 0.8714 (last week’s Marabuzo) attracting buyers. We look for losses to be limited as we move higher in an AB=CD formation (corrective).

Action:

We look to Buy at 0.8714

Stop: 0.8650

Targets: 0.8840 and 0.8880

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Author

Ian Coleman

FXStreet

Ian started his financial career at the age of 18 working as a Junior Swiss Broker at Godsell Astley and Pearce (London). He quickly moved through the ranks and was Desk Manager at RP Martins at the age of 29.

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