The EUR/GBP is trading in the red and managed to slip below a major dynamic support. The breakdown still needs confirmation because this could be another false breakdown if the Euro will start to appreciate again. I’ve said in the last article that the rate is somehow expected to drop further because it has reached a dynamic support after a long time. EUR/GBP signaled an exhaustion from September, has failed to climb above a dynamic resistance.

The rate dropped and ignored the positive Euro-zone data, the Cable was inspired by the BOE, which has maintained the Official Bank Rate steady at 0.50%, matching expectations, the MPC members voted unanimously for this decision. The Asset Purchase Facility remains unchanged, at 435B as the MPC members voted unanimously for this as well.

The Pound was boosted by the UK’s Retail Sales, which have increased by 1.1% in November, beating the 0.4% estimate and the 0.5% growth in the former reading period.

On the other hand, the Euro dropped after the ECB and ignores the Euro-zone Flash Services PMI and the Flash Manufacturing PMI impressive data, the indicators have increased and have signaled that the expansion continues in the manufacturing and services sectors.

The German Flash Services PMI increased from 54.3 to 55.8 points, beating the 54.6 estimate, while the German Flash Manufacturing PMI surged to 63.3 points from 62.5 points, exceeding the 62.1 estimate.

Price dropped below the lower median line (LML) of the major ascending pitchfork, it should drop further if will close the week below this broken obstacle. The next downside target will be at the outside sliding line (SL) of the ascending pitchfork. I’ve said in the yesterday’s article that the price should drop if will fail to close above the fourth warning line (wl4) of the former descending pitchfork.

It could be attracted by the wl3 as well, so the perspective remains bearish even if it will come back to retest the broken support levels.