EURGBP Technical Outlook Points to Lower Prices
Last week, EURGBP posted a reversal candle on the weekly time-frame at resistance arriving by way of a pair of varying angled trend-lines and highs created last year. Furthering along a weakening technical backdrop was the breaking of the channel extending higher from late May until late last week.
And adding yet another layer to the short set-up is the head-and-shoulders (H&S) pattern very near triggering this morning. A 4-hr closing candlestick below 8954 is seen as confirmation of the pattern. The height of the H&S points to a measured move target of around 8860, however; the type of grinding channel that was formed from late May are often wiped out once the structure is broken. This implies a potential move down to around the 8800-mark.
Along the way towards the eventual target, support I’m watching comes in around 8920 and 8872. Should the trade trigger (doing so right now), the invalidation point is above the right shoulder high of 9005.
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EURGBP Weekly Chart (reversals at resistance)
EURGBP 4-hr Chart (channel broken, H&S about to trigger)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.