EUR/GBP. Forecast using strategic levels, analysis of CME options, and patterns for entering the market

By | January 29, 2020

“Everyone chooses his own path. And the more obvious the goal, the easier the path.”

Good morning, dear colleagues.

As always with you, Sergey Denisov and the forecast for the likely movement of the EUR / GBP currency instrument.

This forecast will be relevant until your humble servant reports that either “the forecast has been completed and the goal has been achieved” or “the forecast has been leveled for one reason or another.” I also want to remind you that this forecast is the basis. All subsequent forecasts will be derivatives (always remind us of “where the hands grow from”) from this forecast and lead us to the “cherished goal” in the form of profit!

Well, let’s get started. In your previous forecasts for the European currency i.e “EUR/USD. Forecast and trading plan. CME Options” and for the British pound “GBP/USD. Sell with us – sell better than us!” I talked about the intention to buy EUR / USD after the downward movement and sell GBP / USD. To put it simply, buy EUR and sell GBP. However, don’t you think that this is the currency instrument EUR/GBP, which, according to all the rules of correlation*, should be bought? Yes, this is it!

For EUR / GBP, we have an exceptionally strong “bearish” trend with some corrections from August 11, 2019. Moreover, on the weekly time-frame, one can clearly see a break through of a strong support level. But it is worth noting the fact that during the continuation of the decline, this penetration did not entail, which prompted me to think about a possible false penetration and, therefore, about buying this instrument.

“Maybe I will be wrong, but we trade in probabilities here and enter the market only according to certain patterns and with the iron rules of risk management **”

So, to summarize and justify it, priority for EUR/USD is to buy with target levels of 0.8530, 0.8835 and 0.8950, while now the rationale:

1. Three strategic levels (goals) are above the price, and I already wrote in previous articles that these levels are developed by the price in 80% of cases!


2. The price is currently in the order trading zone, into which the daily entry was made by a bearish impulse movement. And you, dear colleagues, obviously know that as a trend usually begins, so it ends – it starts with an impulse, and it is an impulse in the direction of the trend that can indicate the end of the trend, followed by the price entering the flat. Just like in our situation.


3. The price is above the marginal zone of 25% -27.5% of the growth on January 24, 2020, which may also indicate a possible further growth.


Thus, at the moment, growth is preferable to the target levels of 0.8530, 0.8835 and 0.8950 for the EUR/GBP currency pair.

Dear colleagues, please follow the publication of “derivative” forecasts for EUR / GBP during the whole time that the current forecast is relevant, so as not to miss anything important and ultimately get a profit!

Correlation* is a statistics-based ratio of the direction of movement of trading instruments, which can be direct (when 2 pairs move in the same direction) and inverse (when pairs move in different directions). They also distinguish between the correlation coefficient, which determines how strong the similarity or difference in the movement of certain trading instruments is.

Risk management** is an extremely broad concept and cannot be explained briefly. But to make it easier – this is a specialized system of tools that allows you to limit the risks associated with conducting trading operations.

IMPORTANT! Remember that you should enter the market exclusively by patterns – by graphic patterns that are often repeated on the market. As a result of which, there is a certain pattern of price behavior in the future.

In my trading, I use patterns consisting of candlestick analysis and volume analysis. One of my favorite patterns is updating local extremes on a sharply increasing volume, followed by testing up to 50% -61.8% Fibo.

Thank you for your attention, dear friends.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.