EURGBP Countertrend Setup (Aug 18, 2014)
EURGBP has been moving inside a rising channel for most of the month, as price made higher lows and higher highs. At the moment, the pair is testing the top of the rising channel, which lines up with the .8000 major psychological barrier.
At the same time, stochastic is moving lower, indicating a pickup in selling pressure. This could lead to a selloff until the channel support near the .7950 minor psychological level.
Shorting at .8000 with a tight stop above the latest highs and a target of .7950 could yield as much as a 2:1 return on risk. Trailing the stop and aiming for a channel breakdown could improve the potential return.
By Kate Curtis from Trader's Way