The EURGBP currency pair has been trading in a wide range for a long time. The past three upward moves were equal in size. We are now observing the reaction to the upper limit of the range. In case the price fails to finish the week above it,a potential sell signal surface. There is still some time until the end of the week but there is a high chance that the pound will fail to push higher. It would mark the first “down” candlestick since the beginning of May.
Source: xStation5
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Open real account TRY DEMO Download mobile app Download mobile appTaking a look at the D1 interval, we can see that the price struggles to overcome the 0.8930 handle. This level is important from a technical point of view due to the 1:1 market geometry - the ongoing upward movement matches range of the one from late-2018. Additionally, the bearish engulfing candlestick pattern has been drawn on the daily interval what could be the first signal for bears.
Source: xStation5
Last but not least, the solid momentum of the upward move started at 6th May is clearly visible on the intraday interval (H1). Note that the pair moved almost 500 pips higher without any bigger correction. On one hand, it proves that the trend is strong, but on the other, risk of correction occurring is rising. As long as the price is above the 55-period moving average and the overbalance structure from D1 interval, bulls may remain in markets’ favour.
Source: xStation5
