Have a look at the above image (EURGBP M TF CHART): It was crucial that the monthly candle close convincingly below monthly 0.8500 psychological support. Support break and confirmation would likely lead this pair towards the swing low (0.8300)
Now looking at the main chart (WEEKLY TF EURGBP), we can clearly see that the price is in a descending channel and likely headed towards 0.83000 level in the near future.
However for every trade. a trader needs to evaluate the ideal entry point, SL and TP so that the risk reward ratio aligns in our favor. In this case as per the confluence factors on the chart below are the ideal entry instructions:
TP: 0.83000 (swing low)
SL: 0.87000 (swing high/channel high/W & M 50 EMA)
IDEAL ENTRY TO HAVE 1:1 RR: 0.850000
So as we can see, for this trade to have ideal RR, we need the price to retrace towards 0.8500 level before we can make a short entry. We could see this happen this week as major banks have policy announcement which could make the EURO gain as its too oversold!. This could be a great opportunity to await deeper retracement and have a better RR for this trade.
THIS JUST REPRESENT ONE OF MY ANALYSIS AND ITS NOT A TRADE SIGNAL. SIGNALS ARE USUALLY POSTED ONCE THE CRITERIA MEET IN A NEW POST WITH COMPLETE INSTRUCTIONS
