EUR/GBP: Bear is on the Charge; Would it Make another Breakout?

• EUR/GBP has been bearish on the H4 chart.
• The pair trades around a horizontal support.
• The H1 chart looks good for the sellers.
• Intraday price action has been bearish.

EUR/GBP- Technical Analysis-H4 Chart

The chart shows that the price has been heading towards the South with moderate pace. The pair trades below the simple moving average 30. Thus, the sellers must be keeping their eyes on the pair to go short. At the last rejection, the pair produced a bearish engulfing candle and headed towards the downside in a hurry. However, the pair seems to have found its support at 0.86280. The price reacted at this level several times. Thus, the sellers may wait for the price to make a breakout at the level to go short.

The price may find its next support around 0.85800 in case of a bearish breakout. On the other hand, if the level holds the price as a support, the buyers may wait for the chart to produce a bullish reversal patter to go long in the pair. The price may find its resistance around the SMA 30.

Price Action Analysis- H1 Chart

The chart shows that the price has been heading towards the downside by obeying a bearish trend line. At the last rejection, it produced a spinning top followed by a bearish engulfing candle. The sellers did not wait to drive the price towards the South upon having that strong bearish reversal pattern. On its way, it made a significant bearish breakout at 0.86345. As of writing, the pair trades below that level. The sellers may wait for the price to make a bullish correction or to consolidate followed by a bearish reversal pattern to go short in the pair. The price may make a new lower low and find its support around 0.86000.

Considering both charts, it seems that bear may continue its move. However, it all depends on the breakout at the key horizontal support level.

Written by: Md Tareq Sikder, Senior Analyst Forex Prop News

Contact and follow Tareq on Twitter: @tareqfpn