By: Doug Rosen
Yesterday the EUR/GBP sure took me by surprise. I was really anticipating a down day for that pair, however, it turned out to be an up day. This was mostly due to some heavy hitting news events for both the GBP as well as the Swissy.
Today, and on the daily time frame I have this pair trapped in a triangle price trap and price is currently up against the upper edge of the trap. The 21 ema is also below price and the 5 ema is beginning to cross above the 13 ema. I have said this many times in the past, I love these type of situations because it all boils down to just two possible occurrences; price will either bounce down off the upper trend line or it will breakout to the upside. I suspect that price will in fact break out to the upside with the ema's below price and crossing up.
On the 4 hour time frame much energy is beginning to build up, the 5 ema has crossed above the 13, 21 and 55 ema's and price has pierced above the 144 ema. There is some strong visual resistance above price that has not been broken in a couple weeks but the energy behind this pair could trigger a breakout to the upside through resistance.
The weekly M3 exists at .8605 and price is currently at .8596 and for price to initiate an upside breakout .8605 must first be broken. If price breaks that level the next fight zone will be around .8616 and if that level is broken price should be home free until .8650