EURGBP trading an ordinary pennant with an unusual tradeOk, this is not an ordinary trade, so let's start from the analysis of what is standard in this chart.
There is a very standard pennant, with the price that is forming lower highs and higher lows.
Elements for a short positions:
1. Pennant after a down-movement, breaking a tight range that lasted for nearly one month (bearish chart pattern, in this case);
2. I expect GBP to be strong during this first half of the month. I talked a lot about it in a video on my YouTube channel;
3. Last reaction at the top of the pennant, has been quite strong. To be fair, even last reaction by buyers at the bottom of the pennant, has been very strong. This was mainly due to a strong EUR with a positive Economic Calendar at the beginning of this trading week. Certainly not due to a weak GBP, that is actually behaving quite well against other currency pairs.
Why do I say that this is an unusual trade? Because I'm not trading any rejection, since the price is in the middle of the pennant, but I'm trading a breakout before this is actually happening. The two main reasons for this are: I see GBP starting the trading week with low volatily, as in the previous month, but getting momentum today, with some strong candles at the opening of the London session. The second reason is that I can take advantage of a very good risk to reward ratio, better than 1:3.
Not an ordinary trade, probably the first exotic idea that I publish here on TradingView, but still following what I believe is the best, without deviating much from my trading strategy.
I took some time to write this, I see that the price is meanwhile at 0.8534, I hope you can still plan your trade carefully and wisely :)
