The Best Trading Opportunity Today – EUR/GBP – November 19, 2015

The EUR/GBP is the Forex pair to watch today based on the early price action. The market has been trending lower inside a channel and now appears to be in a position to breakout to the upside if enough buyers can come in to shift the momentum.

The downtrending channel is being formed by a long-term angle at .6952. This angle has guided the market lower since the October 13 top at .7492. A short-term downtrending angle at .7016 has provided the resistance since the November 6 top at .7196.

After trending lower for eight sessions from the .7196 main top, the EUR/GBP appears to be ready to breakout of the channel to the upside. The daily chart indicates there is plenty of room to the upside if the resistance angle at .7016 can be taken out with conviction and if the move can be sustained.

The new short-term range is .7196 to .6981. If the buying is strong enough over the near-term then look for the breakout to extend into its 50% level at .7088. Additional targets include another downtrending angle at .7106 and a Fibonacci level at .7114.

It’s a counter-trend move and will need a serious change in momentum to be successful, but this is possible because strong short-covering rallies tend to occur following 7 to 10 session breaks.

The key to success will be the momentum on the breakout. The inability to follow-through to the upside after taking out .7016 will mean that buy stops triggered the move. In this case, you don’t have to hold on to the trade if it breaks back under .7016 since it’s a momentum play.

In order to be successful, the initial breakout over .7016 should draw the attention of traders who are willing to buy strength.

Watch the price action and read the order flow at .7016 today. A sustained move over this level offers the opportunity to trade up to .7088 over the near-term. A sustained move under .7016 will indicate that the EUR/GBP is still in the hands of strong short-sellers.