Yesterday, in the EUR/GBP currency pair, on the H4 time-frame, a possible upward momentum continuation was discussed but the bottom at 0.86361 was broken, so the possible scenario was invalidated and needs to be re-evaluated.
A sudden surge of bearish pressure on the 24th of April caused a shift in the balance of power in the market, with the resulting strong bearish candles breaking through the 15 and 34 Simple Moving Averages and the Momentum Oscillator breaching the zero baseline.
A closer look at the Momentum Oscillator reveals a negative divergence between point a and b compared to the price at 0.86698 and 0.86827 and this could have alerted technical traders to this possible technical reversal that might happen in the EUR/GBP.
The resulting lower bottom forming at 0.86301 might prove to be a critical support level. Buyers is currently trying to push the market higher but if supply again overcome demand and the sellers manage to cause the price of the EUR/GBP currency pair to break through the critical support level at 0.86301, then three possible price targets may be estimated from there.
Attaching the Fibonacci tool to the bottom of the possible reversal at 0.86301 and dragging it to the top that formed on the 23rd of April at 0.86827, the following targets may be calculated. The first target can be anticipated at 0.85976 (161 %). The second price target can be projected at 0.85450 (261.8%) and the third and final target may be expected at 0.84599 (423.6%).
If the top at 0.86827 is broken, the possible scenario is invalidated and needs to be re-evaluated.
As long as sellers maintain a negative sentiment and supply overcomes demand, the outlook for EUR/GBP currency pair on the H4 time-frame will remain bearish.
A sudden surge of bearish pressure on the 24th of April caused a shift in the balance of power in the market, with the resulting strong bearish candles breaking through the 15 and 34 Simple Moving Averages and the Momentum Oscillator breaching the zero baseline.
A closer look at the Momentum Oscillator reveals a negative divergence between point a and b compared to the price at 0.86698 and 0.86827 and this could have alerted technical traders to this possible technical reversal that might happen in the EUR/GBP.
The resulting lower bottom forming at 0.86301 might prove to be a critical support level. Buyers is currently trying to push the market higher but if supply again overcome demand and the sellers manage to cause the price of the EUR/GBP currency pair to break through the critical support level at 0.86301, then three possible price targets may be estimated from there.
Attaching the Fibonacci tool to the bottom of the possible reversal at 0.86301 and dragging it to the top that formed on the 23rd of April at 0.86827, the following targets may be calculated. The first target can be anticipated at 0.85976 (161 %). The second price target can be projected at 0.85450 (261.8%) and the third and final target may be expected at 0.84599 (423.6%).
If the top at 0.86827 is broken, the possible scenario is invalidated and needs to be re-evaluated.
As long as sellers maintain a negative sentiment and supply overcomes demand, the outlook for EUR/GBP currency pair on the H4 time-frame will remain bearish.