EUR/GBP 4H Chart: Channel Down

Source: Dukascopy Bank SA
© Dukascopy Bank SA
As a result of EUR/GBP bumping into a descending resistance line that connects the peaks of the last 7+ years, the currency pair is now trading in a bearish channel. Considering that the exchange rate is also right at the upper bound of the pattern and that most of the daily and weekly technical indicators are giving ‘sell' signals, the shorter-term perspective is strongly negative as well. The price is expected to confirm resistance near 78 pennies (down-trend line and 200-period SMA) and start a bearish wave, which should eventually extend down to the 0.7530/20 area. There the lower bound of the channel coincides with the February low and monthly S1 and thus creates a solid demand zone.
© Dukascopy Bank SA
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