The EUR/GBP dropped as expected and reached a first downside target. It remains to see how will react in the upcoming days, a valid breakdown will signal a further drop while a rejection will send the rate higher to retest some resistance levels.

Technically, it is expected to climb much higher in the upcoming period, but we cannot exclude a minor rebound.  It seems like that the rate has finally managed to make a valid breakout from the extended sideways movement, that’s why it should drop further in the upcoming period.

Remains to see what will really happen in the upcoming hours as the fundamental factors could take the full control. The ECB Press Conference may bring a high action on the EUR/GBP, that’s why you should be careful because you can register a heavy loss if the market goes against you.

The European Central Bank has maintained the Minimum Bid Rate steady at 0.00%, matching the expectations. The German Ifo Business Climate increased from 117.2 to 117.6 points, exceeding the 117.1 estimate, the Spanish Unemployment Rate increased unexpectedly, from 16.4% to 16.6%, even if the economists have forecasted a drop to 16.1%. Moreover, the German Gfk Consumer Climate was reported at 11.0 points, beating the 10.8 estimate and the 10.8 in the former reading period.

You can see that the rate has reached the 61.8% retracement level, but failed to stay below it at this moment. We’ll see how it will react later after the ECB Press Conference, a dovish speech will send it towards the second sliding line (SL2) of the ascending pitchfork. I’ve said in the last weeks that a valid breakdown from the ascending pitchfork will send the price at least till the sliding line (SL2). A valid breakdown below it will confirm a further drop in the upcoming period. It could be attracted by the third warning line (wl3) of the former descending pitchfork.