As we can see EURGBP is moving towards the apex of this descending triangle. Those with a Bullish bias seem to be holding strong at the 0.87500 key support level, but they seem to be consistently pushed back by the descending trendline of the triangle pattern.
Eventually the triangle will no longer be able to contain price, and we will look for 1 of 3 scenarios:
1) Bullish break out of the triangle. If the breakout is strong enough this could put 0.93000 in play as an extended target.
2) Continued choppy & sideways movement. This would be the least desirable outcome as we will have to wait to see if a new range develops clear high and low points. My personal bias is that if we do get a choppy break of the triangle pattern the range of pips in the short-term will not make this pair worth trading.
3) In my analysis this is the most likely outcome: we will see a breakdown of the current triangle pattern and fall back into the previous corrective/balancing structure that began to form back in December 2016. This range can definitely be traded and would most likely be bounded between 0.87500 on the high side (the previous support line of the triangle, now should function as resistance) and 0.83500 on the low side (a previously key area of support going back to July of 2016). This corrective structure is indicated by the blue rectangle.
Eventually the triangle will no longer be able to contain price, and we will look for 1 of 3 scenarios:
1) Bullish break out of the triangle. If the breakout is strong enough this could put 0.93000 in play as an extended target.
2) Continued choppy & sideways movement. This would be the least desirable outcome as we will have to wait to see if a new range develops clear high and low points. My personal bias is that if we do get a choppy break of the triangle pattern the range of pips in the short-term will not make this pair worth trading.
3) In my analysis this is the most likely outcome: we will see a breakdown of the current triangle pattern and fall back into the previous corrective/balancing structure that began to form back in December 2016. This range can definitely be traded and would most likely be bounded between 0.87500 on the high side (the previous support line of the triangle, now should function as resistance) and 0.83500 on the low side (a previously key area of support going back to July of 2016). This corrective structure is indicated by the blue rectangle.
Comment:
We are at a critical point: Price has retraced to the trendline. Watching now for a bounce or a break.
Bearish bias still in effect.