EURGBP - Trading the breakout of an important key-level
Updated
EURGBP shows very interesting action in this period.
At the bottom, we have an uptrend line that recently proved to be quite reliable, rejecting the price at 0.9020.
Another level that supports buyers' positions can be found around 0.9070, where we have a short term support:
At the top, we have a very good downtrend line that, combined with other key-levels, forms a curious series of chart patterns.
Downtrend line + support = Descending Triangle
Downtrend line + downtrend line = descending channel
Downtrend line + uptrend line = pennant (or symmetrical triangle in this case)
This is what we have:
How to trade so many chart patterns? It might look complicated, but if you really understand the logic of chart patterns, there's a simple plan that we can follow in a scenario like this. We can trade a possible breakout of the uptrend line.
The breakout of the uptrend line would result in a breakout of all the chart patterns that we have analysed so far and, as we know, it could boost the price action in favour of buyers.
So my trading idea for this chart is to place a stop entry order at 0.9160, with the stop loss right below the support and with a take profit that is calculated with the logic of the measured move.
You can check this trade real time on my Swing Trading account. Login and password shared in the Swing Trading Course on Udemy.
Good luck!
At the bottom, we have an uptrend line that recently proved to be quite reliable, rejecting the price at 0.9020.
Another level that supports buyers' positions can be found around 0.9070, where we have a short term support:
At the top, we have a very good downtrend line that, combined with other key-levels, forms a curious series of chart patterns.
Downtrend line + support = Descending Triangle
Downtrend line + downtrend line = descending channel
Downtrend line + uptrend line = pennant (or symmetrical triangle in this case)
This is what we have:
How to trade so many chart patterns? It might look complicated, but if you really understand the logic of chart patterns, there's a simple plan that we can follow in a scenario like this. We can trade a possible breakout of the uptrend line.
The breakout of the uptrend line would result in a breakout of all the chart patterns that we have analysed so far and, as we know, it could boost the price action in favour of buyers.
So my trading idea for this chart is to place a stop entry order at 0.9160, with the stop loss right below the support and with a take profit that is calculated with the logic of the measured move.
You can check this trade real time on my Swing Trading account. Login and password shared in the Swing Trading Course on Udemy.
Good luck!
Order cancelled
Strong rejection on the downtrend line, so we cancel the order. No trade was executed.
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