EUR/GBP has formed a Descending Broadening Wedge pattern on 1H chart. The pattern has 44% quality and 61% magnitude in the 96-bar period.
The pattern started when the pair started depreciating from 0.8116. Currently the pair is trading at 0.7991. Gap between pattern’s support and resistance broadens by 28 pips in 100 bar period. The Stochastic indicator on 1D horizon sends buy signal suggesting a possible bullish rally on the pair in the near future. The SWFX market sentiment is bullish—53% of all open positions are long on the pair. Long traders could focus on 20 bar SMA at 0.7996, Fibonacci (50% of move since 5th of September)/Bollinger’s band at 0.8002/03, daily pivot (PP) at 0.8011, pattern’s resistance limit at 0.8019 and Fibonacci (38.2%)/200 bar SMA at 0.8029/31.
Technical indicators on aggregate point at depreciation of the pair on 1H and 4H time horizons suggesting that the pair will continue to follow pattern’s, downward sloping, trend. In the range of 200 pips from current market price 54% of all pending orders are sell orders. Short traders could focus on Bollinger’s band at 0.7988, daily pivot (S1)/Fibonacci (61.8%) at 0.7976/75 and pattern’s support limit/daily pivot (S2) at 0.7955/52.