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EURGBP – Watch Out this Ending Structure

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The EURGBP cross is developing a rally that has returned close to 5.6% since May 6th. In this article, we review the possible next movement of the cross.

The big picture

The daily chart of EURGBP shows a descending channel pattern, which started in August 2017, once the price reached at 0.9306. Currently, the last rally in development since May is near the upper trendline of the channel. Considering that the current bias is bullish, the question that arises is: How far could the EURGBP rise?

What’s Next?

In the 4-hour chart, we observe the development of a potential ending diagonal. This pattern is warning us about the possibility this rally could end soon. However, we expect the EURGBP to make one last upward movement.

The RSI oscillator also confirms the triangulation movement developed by the price. Also, divergences between price and RSI ratify the bullish cycle exhaustion. It is possible the cross could make a false break in the upper line of the descending channel before falling down. The target zone of the last upward movement of the EURGBP is between 0.90061 and 0.90501. The level of invalidation is located at 0.89198.

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