EUR/GBP: Channel on the H4, Inverse Head and Shoulder on the H1, What’s Next?

• EUR/GBP gets trapped within a parallel channel on the H4 chart.
• Buyers may wait to go long from the value areas.
• The H1 chart may end up producing an inverse head and shoulder.
• Intraday minor charts have been bearish.

EUR/GBP – Technical Analysis- H4 chart

The chart shows that the price gets caught within an up rising parallel channel. At the last rejection, it produced a doji candle followed by a bearish engulfing one to go towards the support of the channel. The price produced a track rail at the simple moving averge 30’s support. Consequently, the next candle came out as a bullish candle. However, as of writing, the pair is on consolidation. The buyers may look to go long upon having bullish signal. Buyers may have to count the channel’s resistance on setting take profit.

On the contrary, if the price continues its bearish move and ends up making a breakout at the channel’s support, the sellers may go short in the pair and drive it towards the last swing low.

Price Action Analysis- H1 Chart

The chart shows that it may end up producing an inverse head and shoulder upon finding its support. The last wave may head towards the swing high or may end up making a breakout there. Thus, the buyers may keep their eyes on the pair for a bullish reversal pattern at the value areas to go long in the pair.

On the contrary, if the price continues its bearish move and makes a breakout at 0.85980, the sellers may get themselves engaged to go short in the pair.

Considering both charts, it seems that the pair is nicely poised to head towards the upside. Inverse head and shoulder on the H1 and parallel channel’s support may make the pair remain bullish for a while.

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

Contact and follow Tareq on Twitter: @tareqfpn