EUR/GBP Price Forecast: A bearish breakout from a shallow rising channel

EUR/GBP is breaking out below the lower line of a shallow rising channel.
If the break holds, the pair will probably continue falling.

Joaquin Monfort FXStreet

EUR/GBP pierces below the lower channel line of its rising channel in a breakout attempt lower.

It is possible the bearish bias evident during the steep fall in August is reasserting itself. A close below 0.8423 (September 10 low) would pave the way for further weakness to a downside target at 0.8406, the 0.618 Fib extension lower. Below that lies support at 0.8385.

EUR/GBP 4-hour Chart

Alternatively, if the break proves false, there is a chance the shallow rising channel could extend, with circa 0.8460 as a possible upside target.

A close above the 0.8464 high (September 11 high) would be required to confirm an upside breakout from the channel. Such a move might reach about 0.8477, the 0.618 Fibonacci (Fib) extension of the height of the channel extrapolated higher.

Author

Joaquin Monfort

FXStreet

Joaquin Monfort is a financial writer and analyst with over 10 years experience writing about financial markets and alt data. He holds a degree in Anthropology from London University and a Diploma in Technical analysis.

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