Big day for the GBP

Today is no doubt a big trading day for the GBP with two very important announcements taking place. First out will be the yearly CPI update and the second event will be Bank of England's Governor Mark Carney, Deputy Governor Sir David Ramsden and MPC member Silvana Tenreyro who are due to testify before the UK’s Treasury Committee later this morning. We will look for any hints on whether they have changed their minds on a November hike.

We surely expect volatility to take place on GBPXXX pairs during the UK trading sessions, as things stand we are expecting a strong GBP.

We have already found a few nice trading setups across the GBP forex pairs. In this post we will only cover EURGBP.

As usual we will go over the daily and the 4-hour charts. We'll begin with the daily.

EURGBP Daily Chart

(click on image to enlarge)

Price action has found resistance at the 60% level and as you can see, it is currently trading below the 30 EMA & DC which indicates that the bears are in control of this one. Our target TP is a little wide but it could be reached in a week or two of trading, thus this is a medium time frame trade. (days/weeks).

The target TP is 240 pips away and the current SL is 50 pips, which makes the risk / reward absolutely fantastic!

Lets move over to the 4-hour chart and see what it is telling us.

EURGBP 4-hour Chart

(click on image to enlarge)

The 4-hour chart gives me further support to the sell idea, price action is trading off the 30 EMA and the DC is widening upwards which suggests strong bearish pressure, but the news could always affect the idea, I nevertheless, believe that this is a solid 7/10 trade idea and the chances of the TP level (green) being reached are strong but watch out for that support level (white).

In general the EUR is weak and I am selling it versus the USD and CHF too.

This trade idea falls under the breakout strategy rules so once the trade is 30 pips in profit I will move my SL to breakeven and turn the SL into a trailing stop loss.

I wish you all an excellent trading day regardless of what you are trading. If you however decide to follow me on this one, leave a comment of your entry level, SL and TP!

Cheers to your success!