Euro vs. Great British Pound (2010-02-03)

Classically speaking, it seems that the royal pair is presently forming the right shoulder for -Head and shoulders bottom pattern- as seen on the provided four hour chart. The anticipated reversal areas reside around 0.8690 zones while the neckline is represented around the key resistance levels between 0.8740 and 0.8760. Thus; we think that the pair will be able to gather the bullish momentum it needs around 0.8690 to activate the classical bullish scenario.

The trading range is among the key support at 0.8580 and key resistance now at 0.8865.

The general trend is to the upside as far as 0.8020 area remains intact with targets at 1.0000 followed by 1.0400 levels.

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Support0.87000.86800.86550.86100.8590Resistance0.87400.87600.88000.88200.8860RecommendationBased on the charts and explanations above our opinion is, buying the pair from 0.8690 targeting 0.8800 and stop loss below 0.8610 might be appropriate.