Hello traders, and welcome to our new article regarding the EURGBP. Today we will focus on the pairs’ structure and its overall direction. Let’s dig in!
On the 4h chart of EURGBP we can see that the price is unfolding in a bigger, bearish movement, which is, as we look closely, in five waves, which also means that a new bearish change in trend is here. That said, the current temporary low is at 0.8667 level, and the following three-wave rise can only be a temporary pause within a downtrend, that can be underway since early March.
This correction, labelled as a-b-c can be slowly ending, if we consider that a correction needs only three-waves for a completion and that we also see the price trading near some interesting resistance and reversal zones. We are talking about the Fibonacci ratios of 38.2, which can slow the current bulls down and also the former swing high of wave iv) at the 0.8799 level, which usually reacts as a reversal for the upcoming correction.
Now, if the price trades as expected, then a new turn lower can be just around the corner for the EURGBP pair, however, we need an impulsive drop down to confirm our expected bearish look.