EURGBP Weekly Technical Outlook
The pair has disposed northward since six months ago. Although last month there was a southward correction, the northward orientation is still very much intact. On the weekly time frame, price action is respecting a support trendline (chocolate colour) from the low of November 2015. However, current price action is operating in an ascending channel with a resistance trendline (purple colour) from the high of March 2017 and the support trendline from the low of November 2015. Two main price waves have formed in the channel and a third price wave is yet to form as the price action of the past four weeks has been in a consolidation. Besides, price action is currently at a location which has served as a significant S/R zone for a couple of times in the past. And there is a counter trendline (red colour) from the price action since August 2017. If price action respects this counter trendline next week, this may hinder further northward move. The 0.87710 area is a likely target for bears.
On the daily time frame, price action is respecting a support trendline (navy colour) from the low of September 2017. This support trendline, together with the counter trendline (red colour) seen on the weekly time frame, formed a triangle pattern for price action on the daily time frame. Notice that there was a 50 Fib retracement of the drop from the high of August 29, 2017 to the low of September 27, 2017. The short-term technicals are in support of a southward disposition of price action. This may see the bears target the immediate support around the 0.87710 area.
On the H4 time frame, price action has been operating in an ascending channel (magenta colour) since September 2017. An upper channel gave way to a lower channel last week after two price waves were formed in it. Two price waves have since formed in the lower channel. The last session on Friday resulted in a doji-like candlestick and we may have to wait for clarity of price action in the early part of next week. Price action may result in a pullback into the channel to the 0.89700 area before a southward turnaround. But, should price action break the support channel line, a likely target for bears is the major support around the 0.87710 area. However, bears may have to contend with the barrier in the 0.88830 area before this target is reached.
I may be wrong. Trade safe and prosper.