The EUR/GBP has decreased significantly today and has erased the yesterday’s gains, is very close also to reach the 0.8488 Monday’s low, could drop further because the Cable has become strongly bullish again. The Pound has also increased versus the greenback, not only versus the Euro, the EUR/GBP is expected to drop further in the coming period after the failure to make new highs. The Euro has decreased even if the Euro-zone data have come in mixed, on the other hand the Cable has increased on the mixed UK figures.

The Euro decreased even if the Spanish Manufacturing PMI rose from 55.3 to 55.6 points, has increased unexpectedly as the traders have expected a drop to 55.1 points, while the French Final Manufacturing surged from 53.4 to 53.6 points, beating the 53.4 points. Moreover the Final Manufacturing has increased from 55.1 to 55.2 points, beating the 55.1 estimate.

We had also some poor data from the Euro-zone,  the German Final Manufacturing PMI was reported at 56.4 points, lower than the 56.5 points, while the Italian manufacturing PMI has dropped from 53.2 to 53.0 points.

The rate has dropped after the failure to close above the 0.8625 static resistance and above the 50% Fibonacci line (ascending dotted line), has also failed to reach and retest the upper median line (uml) of the minor descending pitchfork, signalling that the perspective remains bearish on the short term.

Price is approaching the median line (ML) of the major ascending pitchfork, this level represents a very strong dynamic support, the median line is acting as the magnet, so the price is expected to reach this level. A drop below the median line (ML) will open the door for more declines, most likely will take out the support from the 76.4% Fibonacci level, I want to remind you that a drop below the Fibonacci level will validate the Head and Shoulders pattern.

Technically the price should drop further after the failure to stabilize again above the 100% Fibonacci level and above the upper median line (UML) of the major ascending pitchfork, has shown overbought signs, so the downside movement is natural.