EURGBP broke higher after strong rejection from 1.1340 zone and worse than expected CPI. We can see W variant pattern – Adam and Adam. It is a double bottom pattern which is recognized by rejections at the bottom (pins)- point A. Bounce from the bottom indicated by pinbar rejections is valid when price breaks point B. Overhead resistance usually marks a good price target which in this case, is showing a confluence with 50.0 fib and inner trend line – point C on the chart. Adam and Adam is thus considered a breakout pattern. Because the pattern was validated and the price subsequently rose above its point C we use the pattern as the confluence for next dip. 0.7400 zone is the first POC while next POC is 0.7385 (WPP, L3, Inner trend line). So we could expect next leg of buying if the price bounces off 0.7385-0.7400 towards 0.7464 and 0.7505 subsequently.
Have in mind that and strong 4H close above H4 camarilla ( breakout point ) may accelerate the price towards 0.7505 region. If that doesn’t happen a weakening histogram on h1 might give us the cue that retracement/pullback has started and the price may start to drop from H4 camarilla PP.
The analysis and the article presents Nenad's opinion. Remember, financial trading is highly speculative & may lead to the loss of your funds. Proper risk management is the Holy Grail of trading.
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