The Euro has depreciated substantially against the Pound Sterling since early March. This bearish movement was stranded in a descending channel. The pair was consolidating near the senior channel for a brief period of time last week prior to breaching the junior pattern and surging up to the weekly R1 at 0.8726.
Even though the medium-term pattern was breached yesterday, technical indicators nevertheless remain bearish for the following day and week. A possible downside target in this case is the senior channel at 0.8610. In order to confirm this scenario, the Euro still has to overcome the combined support of the 200-, 55– and 100-hour SMAs and the weekly PP circa 0.8675.
On the other hand, the rate could rebound from the breached channel and the 200-hour SMA and surge even higher within this week. A strong resistance that could halt this surge is provided by the 50.0% Fibonacci retracement and the monthly PP circa 0.8805.