Price is trading in the red and seems unstoppable on the Daily chart. EUR/GBP is expected to drop further after the false breakout above the near-term resistance levels. It was rejected by a very strong confluence area, so the current drop is natural.

The rate is pressuring a strong confluence area formed at the intersection between two critical support levels. A valid breakdown will open the door for more drops in the upcoming period. Technically, it is expected to drop, but right now we still need to wait for a confirmation because we may have a temporary rebound on the short term if the rate will make only a false breakdown.

The Pound increased despite some poor data from the UK today. The Current Account decreased to -20.3B, much below the -19.4B estimate and versus the -15.7B in the former reading period, while the Revised Business Investment dropped by 0.7%, even if the traders have expected to see a 0.5% growth. The Final GDP rose by 0.4%, matching expectations and the 0.4% growth in the previous reporting period.

On the other hand, Euro plunges after the mixed economic data from the Euro-zone. The CPI Flash Estimate increased by 2.1% as expected, while the Core CPI Flash Estimate increased only by 0.9%, less versus the 1.1% estimate.

Price is pressuring the confluence formed between the median line (ml) of the minor descending pitchfork and the first warning line of the ascending pitchfork. A valid breakdown will accelerate the sell-off and the next downside target will be at the downside 50% Fibonacci line of the minor descending pitchfork. Another false breakdown will send the rate higher on the short term.

It is somehow expected to drop after the false breakout above the confluence area formed between the 150% line with the lower median line (lml).

EUR/GBP has failed to reach and retest the upper median line (uml) of the minor descending pitchfork signaling a potentially significant drop.