The 4 Steps That Make This Setup Work

EUR/GBP BUY Setup Using the Short Squeeze Mindset 💶🇬🇧

Many traders struggle with EUR/GBP because it often feels “slow” compared to majors like EUR/USD or GBP/USD. The pair tends to consolidate, fake out, and frustrate trend-followers.

That’s why you need a different lens to trade it effectively — enter the Short Squeeze Mindset.

Why EUR/GBP is Setting Up for a BUY 📈

👉 On the Daily Chart, EUR/GBP just printed a green bar 🟩, signaling bullish pressure. Buyers are quietly stepping in.

👉 On the 4H Chart, however, I see a red bar 🟥. Shorts are leaning into the move, thinking it’s a retracement.

This is the classic short squeeze dynamic:
Retail traders pile into shorts on the smaller timeframe

The higher timeframe (daily) is bullish
Once price flips, those shorts are forced to cover, fueling the breakout


The 4 Steps That Make This Setup Work 🚀

1️⃣ Rocket Booster Strategy

Look for alignment between trend + momentum.
On EUR/GBP, momentum is shifting bullish on the daily timeframe.


2️⃣ Momentum Trading Style

EUR is gaining strength across multiple pairs. GBP is showing weakness.
Cross-checking momentum across the forex board confirms EUR/GBP as a BUY candidate.


3️⃣ Short Squeeze Mindset

Daily = green 🟩
4H = red 🟥

This mismatch means sellers on the 4H are trapped. The bigger timeframe will likely dominate.

4️⃣ Stochastic Overbought Zone

When the squeeze begins, stochastic often pushes into overbought.

This confirms strength, not weakness. Strong trends can remain overbought longer than traders expect.


How To Trade This EUR/GBP Setup 🔑

• 📊 Step 1 – Confirm the Daily Candle
  

Is the daily bar closing green?
That’s your higher timeframe confirmation.

• 📊 Step 2 – Drop to 4H
  

Look for a red bar 🟥 or pullback.
This is where shorts enter. Don’t follow them — prepare to fade them.

• 📊 Step 3 – Entry Zone
  

Wait for bullish candlestick reversal patterns (engulfing, hammer, or piercing line) on the 4H.
Enter on confirmation, not blindly.

• 📊 Step 4 – Targets & Risk
  

First target: recent daily swing high.
Second target: psychological round number (e.g., 0.8600).
Always use a stop-loss below the 4H swing low to protect capital.

The Big Picture 🌍

EUR/GBP might not move 200 pips in a day, but the short squeeze mindset gives you precision entries. Instead of chasing breakouts late, you’re stepping in while shorts are trapped and providing the fuel for your BUY.

This is the type of trade that builds confidence — because you’re aligned with the higher timeframe trend while taking advantage of lower timeframe mistakes.

🚀 Apply this method, and you’ll start seeing EUR/GBP differently.

⚠️ Disclaimer: Trading is risky. Always backtest and practice on a demo account before risking real capital.