Trade # 19: EUR/GBP Short

I have not determined my specific entry point yet, but I am looking to go short EUR/GBP for a decline to at least .7800.

On the weekly chart, notice the clear 5-waves up from .6534. The MACD and RSI divergence indicate that the move is nearly exhausted. Wave-v = Wave-i in percentage terms @ .8191, and the recent high was .8186. Also, given the hammer candle on the weekly chart, I am predisposed to assume the top is in. However, the shorter term chart shows that there could be one more high before the turn.

The 4-hr chart shows 4 waves .7794. I would assume there should be a 5th wave up from this point, but given the factors in the weekly chart, we may not go above .8186. Regardless, I will wait for 5-waves down and sell on an upward correction.


Anonymous said...

Very interesting. I'm going to have to disagree with your projections. I would go short EUR/GBP for a decline to at least .7790. Not 7800.

Narayana said...

Anony, I could see that happening as well.