EURGBP sellers are testing prices below ascending channel support. This is a pattern we first examined on August 28th when buyers were moving to test the channel ceiling at 0.9280.
Since the August 29th bearish rejection candle, the pair has lost more than 300 pips as of today’s session. With prices sliding below support on an intraday basis, today’s close at 5 pm EST will be a key factor in determining the pair’s likely path forward.
A daily close below the 0.9040 handle would have us watching for a retest of the area as new resistance. It would also expose the next key support level at 0.8920. A close below that would pave the way for a move toward the March high at 0.8780.
Alternatively, a close back above 0.9040 before today’s close at 5 pm EST would keep the bullish momentum intact. However, even if buyers manage a session close above 0.9040, justifying a long position would prove difficult due to the velocity of the recent decline.
I’m going to remain on the sideline until today’s final print. Anything below 0.9040 would have me watching for a sell signal for a move toward 0.8920 and perhaps 0.8780.
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