Welcome to our newest feature; DecaPip. The concept is simple: our professional market technician, with an exceptional system, showcases his own daily Support and Resistance levels across a broad spectrum of FX currency pairs. The most effective way to use the levels are:
- If indicated levels hold, look for the price to reverse.
- If levels are broken, look for the price to continue past to new highs or lows.
For Wednesday’s edition of DecaPip Daily I would like to focus on EURGBP as we search for low risk trades in these highly volatile markets.
Currently the EURUSD and GBPUSD have had large reversal days so this pair is an interesting play if these currency pairs do decide to trade in differing directions.Currently the risk event of the week for GBP will be the UK GDP release and we may well see EURGBP heavily traded before and after.
At the time of writing the EURGBP is searching for direction after a large breakout from its well established trading ranges of 0.6900-0.7100 area.
The chart below depicts the breakout and also some crucial levels for traders.
For me the 0.7328 area looks to be important and should provide some resistance and a good indication of selling or buying interest in this pair.
Should the 0.7328 brake we can then look to the 0.7380 level which is currently a great resistance level for anyone interesting in selling this currency pair before Friday’s UK GBP data.
Typically after a large breakout occurs we see price reverse to reasonably near the breakout in hope to attract traders willing to enter the new found trend.If we work on this assumption then I am happy to look for good areas to sell EURGBP if it fails to break the new high it made on Monday.
Currently the 0.7220 support level looks a very valid area and where we will test the appetite of the bulls and whether this is a new trend or just a chance for the EURGBP bears to enter new shorts from better levels.
Got any questions about our new DecaPip feature? Contact Nathan at Nathan@littlefishfx.com
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