Final week, EURGBP posted a reversal candle on the weekly timeframe at resistance arriving by means of a pair of various angled trend-lines and highs created final 12 months. Furthering alongside a weakening technical backdrop was the breaking of the channel extending larger from late Could till late final week.
And including one more layer to the brief set-up is the head-and-shoulders (H&S) sample very close to triggering this morning. A Four-hr closing candlestick beneath 8954 is seen as affirmation of the sample. The peak of the H&S factors to a measured transfer goal of round 8860, nevertheless; the kind of grinding channel that was shaped from late Could are sometimes worn out as soon as the construction is damaged. This suggests a possible transfer all the way down to across the 8800-mark.
Alongside the way in which in the direction of the eventual goal, assist I’m watching is available in round 8920 and 8872. Ought to the commerce set off (doing so proper now), the invalidation level is above the best shoulder excessive of 9005.
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EURGBP Weekly Chart (reversals at resistance)
EURGBP Four-hr Chart (channel damaged, H&S about to set off)
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—Written by Paul Robinson, Market Analyst
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