Greetings traders,
We will probably see EURGBP to continue its longterm trend to the downside.
The 4H chart above shows that price is currently in the .8770 resistance zone and has already rejected it, creating two dojis consecutively. You can also see that price is right on the 61.8% zone of reversal. This indicates a probable reversal to the downside.
If we zoom out to the daily timeframe, it’s clear that the previous bull run was merely a retracement for the downtrend. Price broke through the monthly support and is now currently retesting it before going back to the downside.
If we look at the most recent candlestick, you can see it is forming a pin bar candlestick, which is one of the strongest reversal candlestick you’ll find. Seeing a pin bar candlestick forming at a key level, on top of a 61.8% retracement level, this indicates a strong reversal and probably, an impulsive bear run.
We might even see EURGBP to go down all the way to .8470 which is our -61.8% level.
Overall, I’m going to be looking for sells for EURGBP. However, to play it safer, I would wait till price breaks through that trendline before placing a sell.
