EURGBP produces a greater than 4:1 Reward to Risk ratio setup following the UK economic news. The pair explodes upward after the UK economic news is released. When this type of reaction occurs it frequently (not always) will provide an opportunity for a reversal move.
In this case, there were a confluence (not shown) of signs that the pair was topping out. My students should be able to recognize at least 4. Trading is an extremely difficult occupation, but some trade setups really stand out for the discerning eye. This comes from experience, practice and having a high probability methodology – there are no short cuts.
This setup had a classic reversal pattern and a short is taken with a small stop above structure. As price comes down, we want to get through yesterday’s high, the Asian session high, the Asian session low and make it to our Target 2. Price is very obliging, but as it bounces off Target 1, we exit the trade very pleased.
A great start to the week!
Good luck with your trading!
Back tomorrow if we find a trade.