The EUR/GBP closed Mondays trading sessions with a bearish pin bar rejecting a strong area of resistance that has in the past, proven to be a difficult area for the market to break. Mondays bearish pin bar also happened to be an inside bar which strengthens its bearish outlook.
In the chart below we can see the area at 0.8400 has held previously as strong resistance. Monday’s bearish pin almost perfectly bounces of this level. We can also notice the market is making a triple top suggesting we may see the bears gaining control once again.
With the strong bearish pin bar rejecting a solid area of resistance our preference is to short the pair in anticipation of a further move lower. An initial target will be at the 0.8300 area which is the next area of support. We’ll place our stop just above Mondays high.