In the face of intense scrutiny by investors and traders, unsure of the Greek Crises and its possible ramifications on the rest of the European nations and the UK slowly gaining strength in economic growth, the EUR/ GBP has continued its downtrend over the last few weeks making lower lows as the 20 Period moving average has broken and then held as resistance. The EUR/ GBP broke through a significant support level of 0.8424 and tested 0.8205 as support.
If 0.8424 is tested again as resistance and fails to break back above, then the downtrend is likely to continue.
The downtrend appears to be following a Fibonacci projection movement in which the initial price retraced to the 50% level, suggesting that price could fall further with a likely target of 0.8158 (a key price level as well as the 138.2 Fibonacci projection) and then ultimately to 0.7993 (also a previous key price level and the 161.8 Fibonacci projection).
If the price rises over the coming weeks then a likely target is 0.8424; which is the previous key support level from June last year and February this year. If this level breaks and continues up, then 0.8595 would be a secondary target to the upside.
Dean Wright Senior Analyst FX Knight.com