EURGBP – we had a good roller-coaster today on this pair. The price rallied up breaching 0.9000 with a huge boost, and then with similar dynamics fell below the 4 hour earlier beaten level and currently is 120 pips lower than today’s maximum. We have a bearish pin bar, whose upper shadow barely a few pips exceeded 50% of the Fibonacci correction. Such a situation on the chart may suggest further declines.
The first level of supply will be around 0.8750, where there were two strong rebounds on 17th July and 27th September (resulting in 550 pips and 280 pips rally). If this zone is going to surrender and will be beaten by supply – the declines can continue up to 0.8450 where there is another zone of demand.
On the pages of comparic.com two days ago ( http://comparic.com/eurgbp-will-hs/ ) I wrote about the possible H&S on this pair … if we treat today’s high as the right arm of this formation then the above scenario becomes yet more likely.