The 4H EUR/GBP chart shows a market breaking below a rising wedge to start this week. Price action was heavy, but the market bounced up from near a previous support pivot at 0.8280. Note that the 61.8% retracement of the wedge pattern was nearby at 0.8290. This pullback came up to test the 200 simple moving average in the 4H chart, cracked it, but then was rejected immediately. Since then the market fell back to the 0.8280 confirming the bearish intent by making a new weekly low as we enter the 2/2 US trading session.
The next pivot is at 0.8255, with the 78.6% retracement level at 0.8260. Clearing that opens up 0.8220. The daily chart shows that this decline is in the direction of the overall trend, reflected by a declining channel that started June 2011. There is a negative reversal signal, as the market made a higher RSI high, but lower price high. This suggests a swing projection toward 0.8205.
Fan Yang CMT is a forex trader, analyst, educator and main contributor for FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes and IBTRADE will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.