Update on EUR/GBP
So my last idea about EUR/GBP was showing a couple of descending patterns which indicate a bullish move is probably in the works. However, I felt like my analysis was missing something.
This is my first time analyzing the markets in over 9 months and while I still remember the textbook analysis methods, I'm still getting used to identifying what phase the market is and proper pattern separation.
After further analysis, I would like to update my POV of EURGBP. I still believe a short term move up is probable, but I also understand why the market could drop from this point.
Looking at the Weekly chart, we see the formation of an expanding triangle with 3 touches on the top and 2 touches on the bottom of the structure. This structure is often considered a continuation pattern in the markets. Since this pattern emerges after a bullish impulsive move, the continuation would be a bullish impulse in the long term (Weekly chart).https://www.tradingview.com/x/Hz2CHHdf/
Zooming into the Daily chart, we see a large ascending channel that has been forming since Feb of this year. Yet we also see a descending channel that has been forming after the Sept. bullish impulse. This corrective descending channel has already made the third touch at the bottom of the Daily ascending channel. This third touch tells us that the market can begin an impulsive move at any moment.
Considering that the descending channel was formed as the corrective phase of a bullish impulse, it's safe to assume that the market will continue the bullish nature and move up to potentially make a fourth touch on the Weekly chart. This theory is only made stronger by the fact that we see another descending channel following a bullish impulse in the 4H chart within the descending channel on the Daily chart. A pattern with in a pattern always shows that a strong move is about to take place, in this scenario, a short to mid-term move to the upside.
If the market moves up to make a touch on the Weekly resistance, we will want to pay attention to what happens next. In other words, the top of the Weekly structure is a major area of interest.
The 2 probable possibilities include:
1. Price breaking the Weekly resistance to continue the long term bull movement on the Monthly and Weekly charts, or,
2. Prices drops for the mid-term and makes a third touch on the Weekly support.
Now looking to the other possibilities, the 2 that I can immediately see include:
1. The market continues to move down correctively until we see a reversal pattern/candle or,
2. The market moves down impulsively to touch the Weekly support
It's important to keep the final 2 possibilities in mind, though I see no signs within the market of an immediate move down. With this in-depth analysis of the EUR/GBP, I stick with my short-to-mid-term long position. Again, the Weekly resistance is a large area of interest should we get there. We will want to watch for both reversal and continuation patterns here.
Feel free to leave me your thoughts on this analysis and if you have your own idea on the pair!
This is my first time analyzing the markets in over 9 months and while I still remember the textbook analysis methods, I'm still getting used to identifying what phase the market is and proper pattern separation.
After further analysis, I would like to update my POV of EURGBP. I still believe a short term move up is probable, but I also understand why the market could drop from this point.
Looking at the Weekly chart, we see the formation of an expanding triangle with 3 touches on the top and 2 touches on the bottom of the structure. This structure is often considered a continuation pattern in the markets. Since this pattern emerges after a bullish impulsive move, the continuation would be a bullish impulse in the long term (Weekly chart).https://www.tradingview.com/x/Hz2CHHdf/
Zooming into the Daily chart, we see a large ascending channel that has been forming since Feb of this year. Yet we also see a descending channel that has been forming after the Sept. bullish impulse. This corrective descending channel has already made the third touch at the bottom of the Daily ascending channel. This third touch tells us that the market can begin an impulsive move at any moment.
Considering that the descending channel was formed as the corrective phase of a bullish impulse, it's safe to assume that the market will continue the bullish nature and move up to potentially make a fourth touch on the Weekly chart. This theory is only made stronger by the fact that we see another descending channel following a bullish impulse in the 4H chart within the descending channel on the Daily chart. A pattern with in a pattern always shows that a strong move is about to take place, in this scenario, a short to mid-term move to the upside.
If the market moves up to make a touch on the Weekly resistance, we will want to pay attention to what happens next. In other words, the top of the Weekly structure is a major area of interest.
The 2 probable possibilities include:
1. Price breaking the Weekly resistance to continue the long term bull movement on the Monthly and Weekly charts, or,
2. Prices drops for the mid-term and makes a third touch on the Weekly support.
Now looking to the other possibilities, the 2 that I can immediately see include:
1. The market continues to move down correctively until we see a reversal pattern/candle or,
2. The market moves down impulsively to touch the Weekly support
It's important to keep the final 2 possibilities in mind, though I see no signs within the market of an immediate move down. With this in-depth analysis of the EUR/GBP, I stick with my short-to-mid-term long position. Again, the Weekly resistance is a large area of interest should we get there. We will want to watch for both reversal and continuation patterns here.
Feel free to leave me your thoughts on this analysis and if you have your own idea on the pair!
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