FxWirePro: EUR/GBP rallies taking halt, likely to remain in short term range yet make money through straps

From the lows of 0.7005 EURGBP has shown descent gains to the highs of 0.7300.

At present some bearish pattern candles such as spinning top, gravestone doji and spinning top again have occurred consecutively at 0.7266, 0.7268 and 0.7261 levels respectively, testing resistance at the same juncture.

However, we cannot afford to gauge this as trend reversal but a mere consolidation.

But if you observe when weekly and monthly charts are plotted as to how the above bearish technical indications are lagging, they are baffling to the above signals.

However, there exists a clear downward convergence on RSI on daily with a supportive signal from stochastic curve as well, %D line crossover again sends some alarms to bulls which can be deemed as short term selling pressure.

Upon a breach of immediate supports around 0.7240 on a closing basis, one can expect dips up to 0.7210 and 0.7185.

But there is no substantiation from other leading indicators except stochastic which has shown a slight buying pressures but not beyond 0.7075.

Remember any abrupt upswings can also not be surprised as the medium term seems to be bullish only.

Trade Tips: Contemplating above technical reasoning, trend may head either way with little southward bias which is why we like to recommend buying below strategy.

With risk reversal being neutral (at zero), go long on 1w at the money -0.49 delta put, 2w out of the money (1% strike i.e. our below cap) -0.18 delta put and simultaneously go long on 1w at the money +0.51 delta call with net debit.