How to take Advantage of the Bearish Trend on EUR/GBP?
Good morning traders, today we bring you an analysis and potential setup of what we would expect in the EUR/GBP to be able to trade the downtrend.
🔸Before explaining what we are looking for in this pair, we will focus on analyzing the context and showing you why we consider that the downtrend is still in force.
🔸After the break of the bullish channel, the price started a clear downtrend, which has not had major retracements so far.
🔸All support zones along the way were penetrated without problem.
🔸Last week, a very important support zone was broken, which is where the last bullish momentum started last year.
🔸Now the price is trading below, but this is not enough to initiate a position in this pair.
🔸What we are waiting for and we recommend doing is waiting for a proportional corrective move to the previous bearish impulse, forming some corrective pattern. For example, a flag pattern performing a pullback to the broken zone.
🔸In this way, we will have a safe place to place our entry and stop loss, and in addition, the R/R ratio that it provides us towards the next support zone is quite favorable.
🔸Of course, this scenario is an example and it does not have to happen like that, and there are many variants to this situation, but the idea is to be able to define certain scenarios to be able to be prepared for what the market gives us, and thus adapt quickly.
🔸Before explaining what we are looking for in this pair, we will focus on analyzing the context and showing you why we consider that the downtrend is still in force.
🔸After the break of the bullish channel, the price started a clear downtrend, which has not had major retracements so far.
🔸All support zones along the way were penetrated without problem.
🔸Last week, a very important support zone was broken, which is where the last bullish momentum started last year.
🔸Now the price is trading below, but this is not enough to initiate a position in this pair.
🔸What we are waiting for and we recommend doing is waiting for a proportional corrective move to the previous bearish impulse, forming some corrective pattern. For example, a flag pattern performing a pullback to the broken zone.
🔸In this way, we will have a safe place to place our entry and stop loss, and in addition, the R/R ratio that it provides us towards the next support zone is quite favorable.
🔸Of course, this scenario is an example and it does not have to happen like that, and there are many variants to this situation, but the idea is to be able to define certain scenarios to be able to be prepared for what the market gives us, and thus adapt quickly.
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