EUR/GBP Price Analysis: Bull's commitments tested at familiar support, correction inevitable

EUR/GBP is on the verge of a bullish correction from a familiar supporting level looking left.

The following top-down analysis illustrates the case for a downside extension following multiple failures on the upside across the monthly and weekly charts.  

Monthly chart

The monthly chart has been firmly capped with repeated failures, as illustrated in the above chart.

Of significant interest is the recently failed breakout.

The W-formation was followed by a pullback to the neckline, and that is typical of the pattern.

However, the price failed to extend to a new high from that point and was capped by supply. This is compelling. 

In the same chart, we look specifically into the recent price action. 

Note the breakout's huge rejection which left a long wick on the candlestick? This led to subsequent supply into prior lows.

A break of these lows will be expected to lead to a run towards the lower structure. 

Weekly chart

The weekly chart shows a series of lower highs. 

Noting the current support, a break here could result in a run to the next support followed by a rebound to at least a 38.2% Fibonacci and old support turning new resistance. 

If new resistance holds, expect a follow-through into the next base of demand in a protracted weekly bearish trend. 

Daily chart

From a daily perspective, the chart is overstretched and a correction is probable. 

A 38.2% Fibo, from current lows, is above the prior lows, so monitoring the price action on the lower time frames around those lows will be critical.