28 Oct 2015

BEARISH PENNANT ON EUR/GBP PREFERS MORE DOWNSIDE

EUR/GBP H4

After the EUR breakdown last week, the rate has been consolidating in a tight bearish pennant formation. A downside break should take the rate down to the 61.8% and 100% breakout targets at 0.7115 and 0.7045.

The 0.7045 level also acts as a possible infliction point with the 4-month rising trendline support so without a larger catalyst we are unlikely to see a break of this level today.

An upside break above the pennant's resistance may take the rate up to test the former support at 0.7300 as the new resistance, however, only a daily close above 0.7500 would invalidate my current overall bearish bias for the pair.



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