EUR/GBP Daily Price Forecast – 27th May 2025

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Trade Summary:

EURGBP
Sell Stop @ 0.83797
TP @ 0.83477
SL @ 0.84200

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EUR/GBP Daily Price Forecast – 27th May 2025

EUR/GBP Analysis (H4 Chart)

Overview

The EUR/GBP chart provided is a 4-hour timeframe, showing a clear downtrend with key levels marked for a potential trade setup. The chart includes moving averages (red and yellow lines) and horizontal support/resistance levels. The trade setup suggests a sell stop order at 0.83797, with a stop loss (SL) at 0.84200 and a take profit (TP) at 0.83477.

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Technical Analysis

1. Trend Analysis

• Downtrend: The pair is in a sustained downtrend, as indicated by:

  • Lower highs and lower lows.

  • The price is trading below both the red and yellow moving averages, which are sloping downward, confirming bearish momentum.

2. Moving Averages

• Red Moving Average (Longer Period): Acts as a dynamic resistance, with the price consistently trading below it.

• Yellow Moving Average (Shorter Period): Also trending downward, indicating short-term bearish pressure.

• The crossover of the yellow moving average below the red moving average further confirms the bearish trend.

3. Key Levels

• Sell Stop at 0.83797: This level is below the current price, suggesting a breakout strategy to capitalize on further downside momentum.

• Stop Loss at 0.84200: Positioned above a recent resistance level, providing a buffer against false breakouts.

• Take Profit at 0.83477: A logical target near a previous support level, offering a favorable risk-to-reward ratio.

4. Support and Resistance

• Resistance at 0.84200: This level has acted as a ceiling for price movements, making it a logical place for the stop loss.

• Support at 0.83477: A previous low that could act as a potential target for the bearish move.

5. Momentum and Price Action

• The price is consolidating near the sell stop level, indicating a potential buildup of bearish pressure.

• The lack of significant bullish candles suggests that buyers are weak, and sellers are likely to dominate.

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Trade Setup

• Entry: Sell Stop at 0.83797.

• Stop Loss: 0.84200 (above resistance).

• Take Profit: 0.83477 (near support).

• Risk-to-Reward Ratio: Approximately 1:1.5, which is favorable for this setup.

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Conclusion

The EUR/GBP pair is in a clear downtrend, with bearish momentum supported by moving averages and price action. The proposed trade setup aligns with the prevailing trend, offering a high-probability opportunity to profit from further downside movement. However, traders should monitor for any unexpected reversals or news events that could impact the pair.

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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