Short EURGBP against 91.00

Nobody likes the USD... The buck was sold across the board today and reversed all of its previous gains sending USD index from highs of 77 to below 76. Dollar selling momentum is too strong. The greenback is weak again. However, when the USD strength comes, it will come and take everyone by surprise (maybe tomorrow FOMC statement?). I do not feel comfortable selling USD at these levels so lets look at some cross action.

EURGBP formed a very nice bearish candle formation that gives us great short opportunity. Recent rally stopped right at the 61.8% retracement from March high of 9492 to May low of 8399. Multiple bullish days were followed by a clear signs of bullish move exhaustion: doji followed by an inverted hammer and yesterday a bearish candle. Go short at current levels (0.9042) with a stop above 91. First target is a trendline resistance turned support around 8950. At this level close 1/2 and trail rest with 40 pip trailing stop.

GBPUSD formed a long bullish candle after a hammer pointing to additional strength. GBPUSD move up would help to push EURGBP down.