The Best Trading Opportunity Today – EUR/GBP – November 16, 2015
The EUR/GBP broke shortly after the opening in reaction to heightened geopolitical events due to the attacks in Paris on Friday. The selling pressure was strong enough to take out the November 5 bottom at .7041.
Buyers quickly seized the opportunity to step in and stop the slide. The rebound rally was strong enough to take out the previous day’s close at .7063 and challenge a short-term downtrending angle at .7076. Because of the strong shift in momentum to the upside, the EUR/GBP may be set-up for further upside action, making it the Forex pair to watch today.
Your capital is at risk
Trend traders had their chance to bury the EUR/GBP earlier in the session, but were unable to do so. Perhaps it was the absence of sellers or aggressive counter-trend buyers that stopped the move, triggering the intra-day rally.
We were impressed enough by the size of the recovery and the shift in momentum to consider the strong possibility of a follow-through move to the upside.
Trader reaction to the downtrending angle at .7076 should determine the direction of the market today.
A sustained move over .7076 will indicate the presence of buyers. If the buying is strong enough and the momentum continues then look for a rally into the 50% level at .7109. If this level is taken out with conviction then look for the rally to extend into a potential resistance cluster at .7129 to .7136.
A failure to overcome the angle at .7076 or a sustained move under it will signal the presence of sellers. The next potential targets are today’s low at .7022 and a downtrending angle at .7010.
This is purely a momentum trade as well as counter-trend, but if .7076 is taken out with conviction then look for the move to possibly extend into at least .7109 then .7129 to .7136.