EUR/GBP dropped aggressively and it has reached another downside target. It remains to see what will really happen in the upcoming days, but one thing is certain that the perspective remains bearish. We had a massive drop as expected after the rate it has failed to make a valid breakout above a very strong and crucial dynamic resistance.
The Pound has increased significantly today versus its rivals despite the poor UK’s economic data. We may have a temporary rebound only if the rate it will be rejected by a dynamic support, but as I’ve told you earlier, the rate it is still expected to drop further.
The Cable has increased and has resumed the bullish movement, even if the UK’s GDP increased only by 0.0%, less versus the 0.1% estimate and compared to the 0.4% in the former reading period, while the Manufacturing Production dropped by 0.2%, even if the economists have expected to see a 0.1% growth. The Construction Output dropped by 0.7%, more versus the 0.4% estimate, the Goods Trade Balance was reported at -11.2B, lower versus the -10.9B and versus the -10.4B in the former reading period, while the Index of Services surged only by 0.5%, less compared to the 0.6% estimate and versus the 0.7% growth in the former reading period.
The rate has plunged after another false breakout above the 150% Fibonacci line. The downside movement was paused by the lower median line (lml) of the minor descending pitchfork. We may have a temporary rebound and the rate could test and retest the downside 50% Fibonacci line and the median line (ml) before it will drop further.
Technically, the rate it is expected to drop further in the upcoming period and it could approach and reach the upper median line (UML) of the major descending pitchfork.