EUR/GBP decreased today and is challenging a major dynamic support (resistance turned into support), a valid breakdown will open the door for more declines in the upcoming weeks. Another leg lower if favored after another failure to escape from the extended sideways movement, we had a false breakout in the past week, signalling that the bulls are exhausted on the short term and could lose significant ground.

We may have a great selling opportunity in the upcoming days, so you should keep an eye on this pair because you can catch an important move. Price dropped on the mixed Euro-zone and UK’s data, has changed little in the last days because is setting up for a large move, remains to see the direction because could also be rejected by the dynamic support.

The United Kingdom’s BRC Shop Price Index dropped by 0.3% in June, but less compared to the 0.4% drop in the previous reading period, while the Services PMI decreased more than expected, from 53.8 to 53.4 points, much below the 53.6 estimate, signalling that the expansion has slowed down. Euro is trading in the red as the Euro-zone data has come in mixed.

You can see that the rate is pressuring the median line (ML) of the major ascending pitchfork, a valid breakdown will attract more sellers on the short term. We’ll have a  great selling opportunity if will close below the ML and if will come back to retest the broken level.

However a rejection from the ML will send the rate much higher in the upcoming period, you can see that is moving sideways right above the median line (ML), a further increase will be confirmed only if the rate will jump and will stabilize above the second warning line (wl2) of the descending pitchfork.

We’ll have a buying opportunity if the rate will make a valid breakout from the extended sideways movement, but technically a decrease is somehow expected after the failure to climb towards the 50% Fibonacci line (ascending dotted line) and towards the upper median line (UML) of the ascending pitchfork.