EUR/GBP Daily Price Forecast – 19th May 2025

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Trade Summary:

EURGBP
Sell Stop @ 0.83971
TP @ 0.83650
SL @ 0.84339

 

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EUR/GBP Technical Analysis

The provided chart for EUR/GBP (4-hour timeframe) shows a bearish trend with key technical indicators and levels highlighted. Below is a detailed analysis:

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1. Trend Analysis

• Overall Trend: The pair is in a downtrend, as evidenced by the lower highs and lower lows on the chart.

• Moving Averages:

  • The red line (likely a longer-term moving average, e.g., 200-period) is sloping downward, confirming the bearish trend.

  • The yellow line (likely a shorter-term moving average, e.g., 50-period) is also sloping downward and remains below the red line, indicating bearish momentum.

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2. Key Levels

• Sell Stop: Positioned at 0.83971, indicating a bearish breakout strategy. This level is below the current price, suggesting that traders are waiting for confirmation of further downside momentum.

• Take Profit (TP): Set at 0.83650, which aligns with a potential support level. This level is likely chosen based on previous price action or Fibonacci retracement levels.

• Stop Loss (SL): Placed at 0.84339, above the recent highs. This level provides a buffer in case of a reversal, protecting against excessive losses.

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3. Price Action

• The price is consolidating near the Sell Stop level, indicating indecision or a potential buildup of momentum for a breakout.

• Recent candles show smaller bodies, which could suggest reduced volatility or a pause before the next move.

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4. Indicators

• Moving Averages: The bearish alignment of the moving averages (short-term below long-term) supports the sell setup.

• Support and Resistance:

  • Resistance: Around 0.84339 (SL level), where the price has previously struggled to break higher.

  • Support: Around 0.83650 (TP level), which could act as a target for bearish momentum.

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5. Trade Setup

• Entry: A Sell Stop at 0.83971 ensures entry only if the price breaks below this level, confirming bearish momentum.

• Risk-Reward Ratio: The distance between the SL and TP suggests a favorable risk-reward ratio, making this a potentially attractive trade for risk-averse traders.

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6. Market Sentiment

• The bearish trend and the positioning of the Sell Stop indicate that market participants are expecting further downside in EUR/GBP.

• However, the consolidation near the Sell Stop level suggests caution, as a breakout is required to confirm the next move.

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Conclusion

The EUR/GBP pair is in a clear downtrend, with a bearish trade setup targeting further downside. Traders should monitor the 0.83971 level for a breakout and ensure proper risk management with the SL at 0.84339. If the price breaks below the Sell Stop level, the pair is likely to test the 0.83650 support level. However, a reversal above the SL level could invalidate the bearish setup.

Recommended Lot Size

Trading is all about statistics.

While we can experience winning streaks, we can also suffer from losing streaks.

As such, we should always size each trade to withstand losing streaks (if any).

It's widely recommended that you should not risk more than 2% of your capital for each trade.

We believe it's easier to control your lot size by limiting your lot sizing to 0.01 for every $500 in your account.

So if you have $5000, then risk no more than 0.10 lot size per trade.

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If you spot a mistake especially when it comes to the price, please use common sense and check the chart.

We wish you good luck and good profit for this trade idea.

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