EURGBP has been heading towards the South on the H4 chart. The price has kept making lower lows. On the journey, the price had a consolidation and started going towards down again. After producing a solid Daily bearish candle yesterday, the H4 chart seems to have started having a correction. This means the pair might offer another short entry to the sellers. Let us have a look at the EURGBP chart.
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As the chart shows that the price has come out from a consolidation and marched towards the level of 0.86700. The level of 0.87080 is a level which has the potential to be the level of resistance. If that happens and the level ends up producing an H4 bearish engulfing candle afterwards an H1 breakout at the level of 0.86700, then the price would head towards the level of 0.86150 with huge selling pressure. Let us have a look at the summary of the trade…
- Sell Stop order: 0.86700
- Stop Loss: 0.87080
- Take Profit: 0.86150
Traders often get confused with breakout. In the financial market, there is a saying that ‘a breakout is a breakout’. This is true, but to take an entry a breakout candle has to be strong, solid with a tiny or no spike. This is what is called a momentum breakout. If we look on charts, we get thousands of examples where breakout took place, but price did not act as it should have been. That was because the breakouts were not momentum breakouts.
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