Short on EUR/GBP

EUR/GBP Weekly Chart

Looking at the weekly chart for EUR/GBP, it looks ripe for a downturn. On a weekly chart, the trend is down.

EUR/GBP Daily Chart

Over to the daily chart, the trend is up. But I am betting that the weekly trend will override the daily trend soon enough. That is why I am considering shorting it.

EUR/GBP Daily Chart Zoom-In

Zooming in, I see a MACD Histogram divergence from May to Jul 2013. That seconds my decision to short it. With stop loss at 0.8724, target at 0.8412, and entry point at 0.8632, my reward-risk ratio is close to 3. However I set an initial 0.8493 as initial target for the first 3 days in the trade. After 3 days if the initial target is not reached, I remove the target and preferably ride my profits down.

Why do I have an initial target for the first 3 days? Because if the markets moves strongly within the next 3 days and reaches my target, it is prudent to just take the quick profit and remove your exposure from the market. However, if that does not happen, I am prepared to ride a longer period for a bigger profit, together with the risk exposure of course. In this case, my reward is 3 times my risk.