Looking at the EURGBP chart at the D1 interval, one can notice that the pair is testing the neckline for a wide head-to-shoulder pattern, which may support the harmonic pattern. Nevertheless, it will be important whether the price remains below the 0.8405 zone. If buyers manage to break higher, the upward move could spread towards another resistance at 0.8584.
Regarding harmonic trading, a potential XABCD pattern may be forming. Currently the pair is moving within the CD wave, i.e. the last wave of a potential harmonic system. According to traditional assumptions, the price should reach the 0.8315 - 0.8269 zone, which marks the point D - where an upward move may be launched.
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Create account Try a demo Download mobile app Download mobile appThe blue zone coincides with the 78.6% retracement of the XA wave (potential point for a Gartley pattern), plus the AB and CD wave geometry (red rectangles), and an external retracement of 161.8% derived from the BC wave, which provides additional confirmation. To sum up, if the price remains below the zone at 0.8405, a move towards point D is possible. If buyers become more active at this level, a new upward impulse may appear. Basic assumption of harmonic trading is a change of current sentiment and an attack on the A point of the pattern.
EURGBP interval D1. Source: xStation5
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