Home Forex Market Analysis Forex Signals EURGBP Unveils an Engulfing Candle Pattern

EURGBP Unveils an Engulfing Candle Pattern

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Description

The EURGBP cross, in its 4-hour chart, illustrates a downward corrective sequence that seems to be ending. The engulfing candle pattern in the first trading session of the week unveils the possibility of a new rally.

The big picture reveals an impulsive movement developed since early September at 0.88685; this move ended on September 11th, when the price topped at 0.92212. Once the price found resistance, the cross started to develop a retrace as a descending wedge pattern. This chartist formation calls for the continuation of the previous upward impulsive move.

The engulfing candle formation suggests the possibility of a bullish side positioning at 0.90634 (or better) with a potential profit target at 0.9148, which corresponds to the nearest resistance zone from where the price could start to consolidate.

A second option is to maintain the trade looking for the AB=CD pattern completion, with a potential profit target located at 0.94329.

The invalidation level locates below the intraday low at 0.90224.

Chart

Trading Plan Summary

  • Entry Level: 0.90681
  • Protective Stop: 0.90181
  • Profit Target: 0.91531
  • Risk/Reward Ratio: 1.70
  • Position Size: 0.01 lot per $1,000 in trading account.

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