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EUR/GBP has formed a Descending Triangle pattern on the 1D chart. The pattern has 79% quality and 80% magnitude on in the 146-bar period.
The pattern started on the 8th of November, 2013, when the pair started appreciating from 0.7961; currently it is trading at the weekly pivot (PP) at 0.8447; pattern's support is at 0.8405 and is set to intersect with the pattern's resistance on 22nd of June, 2013. Trading volume seems to be increasing in the length of the pattern. The Stochastic indicator, which is constructed to predict major turning point, sends buy signal suggesting the pair should bounce from the pattern's support and breach the pattern' upward. Long traders could focus on the 20-day SMA at 0.8461, Fibonacci retracement (38.2% of 8th of November, 2012, to 25th of February, 2013, move)/weekly pivot (R1) at 0.8489/93, 0.8535/52 area (weekly pivot (R2), 100-day SMA, Bollinger band and pattern's resistance) and weekly pivot (R3) at 0.8582.
Technical indicators on aggregate point at depreciation of the pair on 1D horizon. At the moment market has significant bearish tendencies as 56% of traders have already sold the euro versus the cable and 64% have posted pending orders to do the same. Short traders could focus on the pattern's support/daily pivot (S1) at 0.8405, Bollinger band/weekly pivot (S2) at 0.8371/59 and weekly pivot (S3)/200-day SMA at 0.8317.
Main fundamental events which could have significant impact on the pairs development in the near future are BOE Governor speech and Inflation report on 15th of May and French and German manufacturing CPI announcement on 23rd of May.
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