The EUR/GBP currency pair, on the H4 time-frame, was in an uptrend until the 17th of July when a higher top was recorded at 0.90513. The bears found the price appealing and sellers overcame buyers.
After the top at 0.90513 the market broke through the 15 and 34 Simple Moving Averages, the Momentum Oscillator pierced the zero baseline into bearish terrain and the 15 and 34 Simple Moving Averages crossed, forming a so-called Death Cross. This confirmed the possibility of a technical trend reversal.
A possible critical support level formed when a lower bottom was recorded on the 19th of July at 0.89572. Buyers then temporarily pushed the price higher and a lower top was registering on the 23rd of July at 0.90055.
Subsequently, bearish pressure caused the EUR/GBP to break through the critical support level at 0.89572 with a short position ensuing and three possible price targets may be expected from there.
Attaching the Fibonacci tool to the bottom of the possible reversal at 0.89572 and dragging it to the top of the pullback at 0.90055, the following targets may be considered. The first target can be anticipated at 0.89273 (161 %). The second price target can be predicted at 0.88790 (261.8%) and the third and final target may be expected at 0.88009 (423.6%).
If the resistance level at 0.90055 is broken, the position needs to be liquidated because the possible scenario is then invalidated and will need to be re-evaluated.
As long as sellers maintain a negative sentiment and supply overcomes demand, the outlook for the EUR/GBP currency pair on the H4 time frame will remain bearish.
After the top at 0.90513 the market broke through the 15 and 34 Simple Moving Averages, the Momentum Oscillator pierced the zero baseline into bearish terrain and the 15 and 34 Simple Moving Averages crossed, forming a so-called Death Cross. This confirmed the possibility of a technical trend reversal.
A possible critical support level formed when a lower bottom was recorded on the 19th of July at 0.89572. Buyers then temporarily pushed the price higher and a lower top was registering on the 23rd of July at 0.90055.
Subsequently, bearish pressure caused the EUR/GBP to break through the critical support level at 0.89572 with a short position ensuing and three possible price targets may be expected from there.
Attaching the Fibonacci tool to the bottom of the possible reversal at 0.89572 and dragging it to the top of the pullback at 0.90055, the following targets may be considered. The first target can be anticipated at 0.89273 (161 %). The second price target can be predicted at 0.88790 (261.8%) and the third and final target may be expected at 0.88009 (423.6%).
If the resistance level at 0.90055 is broken, the position needs to be liquidated because the possible scenario is then invalidated and will need to be re-evaluated.
As long as sellers maintain a negative sentiment and supply overcomes demand, the outlook for the EUR/GBP currency pair on the H4 time frame will remain bearish.