EUR/GBP FX (Spot Rate) – Short-term tech­ni­cal anal­y­sis

Financial Mirror (Cyprus) - - FRONT PAGE -

The forex pair EURGBP on the daily chart from March un­til May in­di­cates a trad­ing range con­firmed by a side­ways move­ment.

From the above daily chart we ob­serve a for­ma­tion of a bear­ish Fail­ure swing com­pleted down­wards oc­curred be­tween April 28 and May 22.

The first top (Point A) was formed on May 7 with a high price at £0.7481 fol­lowed by a bot­tom (Point B) on May 13 with a low price at £0.7121.

The sec­ond top (Point C) was formed on May 15 with a high price at £0.7281.

It is ob­vi­ous that the mar­ket failed to make an equal or higher top from point A as a re­sult of hav­ing a fail­ure swing top.

Once Point C breaks the lower price of Point B (£0.7121) in a down­ward move­ment then we set up our ex­pected tar­gets (1st, 2nd and 3rd). In or­der to iden­tify the tar­gets, we mea­sure the ver­ti­cal dis­tance from Point A to Point B. Later on, we use the same dis­tance start­ing from the break point (B) and we mea­sure from the last bot­tom to the next top.

Con­tin­u­ing with our anal­y­sis, we ob­serve our first tar­get to be at £0.6736, the sec­ond tar­get at £0.6360 and our third tar­get at £0.5992.

In case the price fails to reach the break point (£0.7121) then the fail­ure swing top will not be valid.

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