Yahoo Finance EURGBP, Small Bullish Correction and Then 0.869?
This week should be all about the rates in the US but events around the Brexit should also be important. Various sources are expecting a major breakthrough in negotiations this week. This should obviously strongly affect the GBP so let’s look on the EURGBP, where apart from the forthcoming fundamental influence, we also do have an interesting technical situation.
EURGBP is mostly influenced by the head and shoulder pattern (interestingly, like many instruments with the USD at the moment). The pattern is quite old, the minimum target of the H&S was already made, so we may say that the formation has already expired. The bearish sentiment is untouched though. EURGBP is in a negative territory because the price broke the support on the 0.8845 (purple) and the lower line of the symmetric triangle pattern (pink). Current long-term target is the support of the green area, around the 0.8690. It was a crucial support in December 2018 and January 2018.
The chances that we will get to the green area are very high but in the meantime, watch out for a potential bullish correction. From the local top (7th of March, we already declined almost 200 pips without any major pause. For the EURGBP it is a lot, so with every pip lower, the chances for a local, small upswing go higher.
This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis
This article was originally posted on FX Empire
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