This is the daily chart on the eurgbp and what we are looking here is a classical double three running correction for wave 2 green and the thing is that this pattern is always being followed by a third wave extension, so a clear impulsive move to the downside.
A double three running is, like the name suggests, a complex correction that actually it is formed by three different corrections, two of them going against the previous trend and one in the direction of the previous trend, making new lows in this case.
In our situation the first correction is called a double combination, then we have the correction that goes in the direction of the previous trend, and that one is a triple combination, and the second wave green should end with a contracting triangle, which, and attention here, should not end above the lows in previous wave 1 green.
From my point of view we are in the second leg of that contracting triangle on the daily chart and by taking the time it took the first correction to form and projecting it on the right side we have an educated about when this triangle should end.
Therefore, I would like to sell any strength above 0.8310-30 area having three different targets to the downside and booking one third when each target is reached: 0.8204, 0.8000 and 0.7750
Invalidation or stop loss should be 0.8460-80 area and the stop loss should be moved to break even by the time first target, 0.8204 is reached.
About Mircea Vasiu
Mircea Vasiu has an MBA in International Business from an American University, graduating Magna Cum Laudae. He has been a professional trader for the last 8 years and is involved in various educational projects for different financial companies. He also runs a trading signal for the currency markets at www.capitalpropertiesfx.com.