The EURGBP has rallied from its 200 DMA and entered a narrow rising wedge formation as visible in this H4 chart. This pair has tried to form a top over the past two sessions and is prepared for a breakdown which should take this pair back down to its 200 DMA.
MACD shows a decrease in momentum over the past few sessions and has formed a negative divergence. RSI has traded in extreme overbought territory and formed a negative divergence as well. A breakdown from extreme territory should accelerate the sell-off.
We recommend a short position at 0.8385 with no additional entry levels. This is an addition to two exiting short positions which were opened at 0.8160 and 0.8300. Those traders who have open short positions are advised to open a long hedge before adding new short trades to this group.
Traders who wish to exit this trade at a loss are advice to place their stop loss level at 0.8450. We do not use stop loss levels and will remain committed to this trade as recommended. Place your take profit level at 0.8200.
