Trade of the Day: EUR/GBP
By: Dima Chernovolov
EUR/GBP continues to fall inside the 4-hour Falling Wedge chart pattern which was identified previously by Autochartist. Autochartist rates the quality of this Falling Wedge at the 6-bar level – which is the result of the slow Initial Trend (1 bar), above-average Uniformity (6 bars) and near-maximum Clarity (9 bars). EUR/GBP is expected to fall further inside this chart pattern – in line with the earlier breakout of the key support level shown below.
As can be seen from the daily EUR/GBP chart below, the pair earlier broke below the key support level 0.8800 (former monthly low from September) – which strengthened the bearish pressure on this currency pair. This price level is acting as the strong resistance after it was broken. The proximity of this resistance level increases the probability EUR/GBP will continue to fall inside this Falling Wedge.