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Collins: Why I am shorting EURGBP

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Prior to this week’s trading, the market had posted gains six weeks in a row, Collins says. While the moves were exaggerated by the holiday period, sentiment was left overstretched, he adds.

Demand continued on Monday, but only to see the highest levels since October sharply rejected, and the prices action created an imperfect inverted Hammer pattern, which is bearish, Collins says.

With the pair falling on Tuesday, he is now looking to go against trend and be short around .7330 and any intraday rally to .7345. His downside targets for the trade are .7307/12 area and .7284 with a stop loss at .7366.