Chart: EURGBP, Daily
The European single currency has been appreciating in front of the Great Britain’s pound for the 10 months. A stronger rally started at the beginning of 2013 which got the price for EURGBP to 0.8814. This was the high of the trend because after hitting this level the pound started to recover.
From 25thof February until 20th of May the price has drawn a Falling Wedge which was confirmed by a breakout on 21st of May. This should have been a positive signal for the existing trend, but from 22nd the price hit a resistance area right under 0.96 from which the price was rejected until today.
Every time the buyers tried to push the euro higher, the fans of GBP pushed the price back under 0.8560. If today’s closing price will be again under the level I have mentioned earlier, then the probability of a down move will be higher.
A good technical confirmation would come with a down break under 0.8535. The target for this fall could be the support area at 0.8420 where the price has hit several times in the past. This fall could also mean a breakout under the trend line, more bearish signals for this currency pair.
Confirmation Level: 0.8533
Target Level: 0.8418
Stop Loss: 0.8581