new to trading but an analyst at heart… I found this as an interesting way to look at this pair I’ve been following.
PART 1 SHORT:
EURGBP is looking bearish based on fibonacci retracements not being able to close above the .618 retracement and not being able to close above the trendline
If the prices continue to drop we can expect it to fall within one of the following places (as seen on the charts):
1. .90438 - .90370 (historically strong support and resistance in this zone)
2. The neon green rectangles/sections 1.618, 2.618, or 3.618 (based on fib extensions from the .618 retracement that EURGBP has not been able to close above). These are also strong areas of support and resistance
PART 2 BUY:
Looking at the bigger picture from the previous rally up we have a larger bullish .618 retracement that could form which coincides with the bearish move potentially forming now.
Where the 1.618 extension falls within the (purple) .5 - .618 retracement, in my opinion is the perfect “swap zone” or an area to pay close attention to price action…. Ride the wave down for the smaller move and catch the buy going up In other words, Liquidate the shorts, and buy on the up move. But this all depends on prices staying in these levels ( purple retracements: .5 - .618 )
Part 2, the buy, all hinges on the price not closing below the .618 level. From my understanding, piercing the .618 level is okay, we just don’t want to see it close below it. But if it does, that cancels out the buy position, as that will violate Elliott wave principles.
Let me know what you think!
— Fontana
PART 1 SHORT:
EURGBP is looking bearish based on fibonacci retracements not being able to close above the .618 retracement and not being able to close above the trendline
If the prices continue to drop we can expect it to fall within one of the following places (as seen on the charts):
1. .90438 - .90370 (historically strong support and resistance in this zone)
2. The neon green rectangles/sections 1.618, 2.618, or 3.618 (based on fib extensions from the .618 retracement that EURGBP has not been able to close above). These are also strong areas of support and resistance
PART 2 BUY:
Looking at the bigger picture from the previous rally up we have a larger bullish .618 retracement that could form which coincides with the bearish move potentially forming now.
Where the 1.618 extension falls within the (purple) .5 - .618 retracement, in my opinion is the perfect “swap zone” or an area to pay close attention to price action…. Ride the wave down for the smaller move and catch the buy going up In other words, Liquidate the shorts, and buy on the up move. But this all depends on prices staying in these levels ( purple retracements: .5 - .618 )
Part 2, the buy, all hinges on the price not closing below the .618 level. From my understanding, piercing the .618 level is okay, we just don’t want to see it close below it. But if it does, that cancels out the buy position, as that will violate Elliott wave principles.
Let me know what you think!
— Fontana