EURGBP has been moving north for a long time. It is noteworthy that during these increases, the market repeatedly tested and rejected the bullish trend line every single time. As a result of the downward trend since Tuesday, the price has crossed this line and we are currently observing its re-test. A permanent rejection of this resistance could open the way to further decline.
Looking on H1 chart, we see that the currently tested resistance also coincides with the 38.2% Fibonacci correction of the recent declines and the supply side has occurred twice in its vicinity. It is also worth noting that a permanent rejection of this level could create the right arm of bearish head-and-shoulder formation (H&S). However, for this formation to be confirmed, we would have first break support 0.9188 which is the neckline of this pattern.
If this happens, potential drops could reach even vicinity of 0.9078, which not only provides significant support but also precisely fills the technical range of the H&S formation.
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