Trade of the week: short EUR/GBP

(Partial video transcript)

This week's trading opportunity

Axel Rudolph: Hello and welcome to "Trade of the week" on Monday the 7th July, 2025. And let's look at a trade straight away, which is to go short EUR/GBP. Sometimes it makes sense to look at a longer term chart because clearly we've got an uptrend in EUR/GBP on the daily chart.

So, why would you like to sell it? Basically, if you go into the weekly chart and you go all the way back to the highs seen in September of 2022, you can see that we've got this tentative resistance line not far above where we're trading at the moment. But, more importantly, what we also have if you go back to last week's high where we're trading at the moment and you go to the left, it's slightly above the August 2024 high. It's around the April 2024 high. It's slightly below the highs going back to December 2023 and also the highs here, July 2023.

And, as you know, I love clusters.So if you've got previous weekly highs and monthly highs going back many years, then there's a very high likelihood that that area will act as resistance. And if you also have a tentative or, even better, a proper trendline with three touching points in that vicinity, then we could see a reversal of the trend happening. And you can see something like this happened back in April of this year, when we had this ABC correction to the upside, and then we drifted back down again.

Currently moving up, we've had what I perceive to be five waves to the upside. So, we’re also getting from an earlier wave count back towards the sort of end move. My count might be incorrect, but still, there is a lot of resistance in this area.

From a longer term play, what I would like to do, for purely technical reasons, is to go short EUR/GBP, probably around current levels - let's say €0.8639, where it’s trading at the moment, with a stop-loss above not just this high here on the 11th April of this year. Why not just this one? Because basically if we go further up the chart, you've got a higher high, which is where the highest one of the long candle here, because this high here, basically is slightly below this high here, going back to November 2023. And that was made at €0.8769. So for the sake of 30 pips, I'd rather have a higher stop-loss where I had two weekly highs being made, which may be together with this high on April 2025 - a good resistance area.

Previous trading outcomes

But what I also would like to mention very quickly is the previous "Trade of the week" from last week. We went long gold on Monday 30th June. We did so down here around $3,285.00. We had an upside target in place around $3,400.00. Didn't quite reach it, but we can see here we had a really nice profit within three days. So, that one for me is considered to be done.

And, as I said before, this is not trading advice. These are just setups that I show you. I don't trade any of these personally and neither should you. You should do your own research. But, I'm showing you setups, and that's why targets might be there, but they may never get reached, etc..

And the same happened to USD/JPY from a few weeks ago. We went short USD/JPY on the 23rd of June and we did so up here somewhere around, I believe, ¥147.50. I had a downside target, a longer term downside target, around ¥140.00 But probably I would have now been out of this trade because we went all the way down to this support area here around ¥143.00, maybe ¥144.00. So, if you're still short from up there, just lower your stop-loss to your entry level so you've got basically a free trade on because the current counter trend move to this downtrend might soon fizzle out, and we might go back down again, over the long term and perhaps reach that ¥140.00 level I talked about earlier on.

This week's trade in summary

So basically, the current "Trade of the week" is to short EUR/GBP and have a stop-loss above €0.8770 and a downside target, probably around the €0.84 area. But this is a long term trade, so over the summer etc..