EUR/GBP increased today and has tried once again to make a breakout above a dynamic resistance. The next days will be crucial because if the rate will fail to make a valid breakout above the near-term resistance levels, then we may see another downside movement.

Price has retreated in the last hours and now is located much below the crucial resistance lines, so maybe will be better for you to stay away from this pair and wait for a fresh trading opportunity.

We had a poor economic calendar today, the rate was driven more by the technical factors. We’ll see what will happen tomorrow after the Euro-zone Services and Manufacturing data will be released.

EUR/GBP maintains a bullish perspective on the Daily chart as long as it is trading within the ascending pitchfork’s body. The current upside movement was expected after the rate has moved far away from the median line (ML) of the major descending pitchfork and have failed to stabilize below the upside 50% Fibonacci line.

You can see that it has failed to reach the 150% line which represents a very strong dynamic resistance. A failure to reach this dynamic obstacle or a false breakout above it will send the rate down aggressively in the upcoming weeks.

If you’ll take a look at the H4 chart you’ll notice that the rate has failed to stay and stabilize above the median line (ml) of the minor ascending pitchfork signaling an exhaustion. However, only a valid breakdown from the upside pitchfork will announce a significant downside movement. We had several false breakdowns below the lower median line (lml) in the last weeks, so you should wait for a valid one if you want to go short on this pair.

A valid breakout above the 150% Fibonacci line (see the daily chart) will signal a further increase within the ascending pitchfork’s body.