Trade of the Day: EUR/GBP
By: Dima Chernovolov
EUR/GBP continues to fall inside the hourly Down Channel chart pattern which was identified previously by Autochartist. Autochartist measures the quality of this Down Channel at the 7-bar level – which is the result of the above-average Initial Trend and Down Channel (6 bars) and near-maximum Clarity (9 bars). EUR/GBP is expected to fall further inside this Down Channel – in line with the earlier downward reversal from the key resistance area shown below.
As can be seen from the daily EUR/GBP chart below, the price earlier reversed down sharply from the resistance area lying between the powerful, long-term resistance level 0.9300 (which has been reversing the par from last December) and the upper weekly Bollinger Band. The proximity of this resistance area and the overbought weekly Stochastic increase the probability EUR/GBP will continue to fall inside this Down Channel.