EUR/GBP is trading in the red and could drop much deeper in the upcoming weeks if it will make a valid breakdown below the near-term support levels. Price is pressuring a confluence area, so we have to wait for a valid breakdown before we’ll go short again.

Technically, the perspective remains bullish on the Daily chart as the rate is trapped within an ascending pitchfork’s body. Right now you should stay away because we don’t have any trading opportunity, but I really hope that we’ll have one very soon even if will be a buying one.

EUR/GBP has retested the median line (ml) of the ascending pitchfork and now has decreased again. The false breakout above the upside 50% Fibonacci line of the ascending pitchfork has sent the rate down. It is pressuring the confluence area formed at the intersection between the downside 50% line of the ascending pitchfork with the 150% Fibonacci line of the major descending pitchfork.

Unfortunately, it has failed to stabilize above the median line (ml) of the minor ascending pitchfork in the last attempts, so we can think at a potential downside movement.

However, you should wait for a valid breakdown below the lower median line (lml) before you will go short. The rate could only test and retest the 150% line before will increase further within the ascending pitchfork’s body, but a valid breakdown below the lower median line (lml) and a failure to stay above the 150% could announce a significant corrective phase.

I’ve drawn a descending pitchfork on the H4 chart to catch the downside movement. Price has found a very strong support right below the median line (ml) and it has jumped higher. It could drop after the failure to stabilize above the upside 50% Fibonacci line. A valid breakdown below the lower median line (lml) and below the median line (ml) will give us a great chance to go short.