EUR/GBP Retracement Setup (June 25, 2014)
EUR/GBP is showing signs of pulling back to the retracement levels and trend line marked on the 4-hour time frame. As you can see, the 50% Fibonacci retracement level lines up with the .8050 minor psychological level, which might act as resistance for the pair.
Stochastic seems to be showing signs of moving lower, which might mean a return of selling pressure for this pair. If the Fibs hold as resistance, price might fall back to its previous lows near the .7950 minor psychological level or create new ones.
Data from the euro zone, such as German and French manufacturing and services PMIs, have been weaker than expected. Meanwhile, the BOE inflation report showed that Carney clarified rate hike expectations will be based on data, but it doesn’t change the central bank’s stance to start moving towards higher rates.
Shorting at .8050 with a stop above .8100 and the trend line and a target of new lows could make a good return on risk.
By Kate Curtis from Trader's Way