Friday, April 10, 2009

EUR-GBP Possible break of trendline?

eur gbp daily 10.04.09 

The pair is currently at the trendline arising from November swing lows, and in fact is trading slightly below it since the last few hours. A decisive close below the trendline would mean that the long term trend is now down after seeing an intermediate lower high at .95  and we would ultimately see much lower levels for the pair.

I had pointed out the presence of a Head & Shoulders pattern clearly visible on the 4 hour chart last week, and this whole week we’ve been seeing price action on the downside (updated chart below).

 

eur gbp 240 mins 10.04.09

Infact, on the 4 hour chart, price has already broken through the trendline, tested it briefly once and continued with the downtrend. We might see a proper retest of the line though once, before it continues south. The minimum target as suggested by the Head & Shoulder pattern is below .8850, but a break of trendline would mean I would seek a more lasting trend & much lower levels.