EUR/GBP 4H Chart Broadening Wedge - October 5, 2012

EUR/GBP has formed an Ascending Broadening Wedge pattern on 4H chart. The pattern has 46% quality and 84% magnitude in the 235-bar period.

The pattern started when the pair rebounded from 0.7964; currently it is trading at 0.8039. Gap between pattern's support and resistance broadens by 25 pips in 100 pips period.

Technical indicators on aggregate point at appreciation of the pair on 4H and 1W horizons suggesting that pair will continue to move towards pattern's resistance and will follow pattern's, upward sloping, trend.

Long traders could focus on daily pivot (PP) at 0.8040, Bollinger band/daily pivot (R1)/weekly pivot (R3) at 0.8058/60, daily pivot (R2) at 0.8070 and daily pivot/26th of June high at 0.8087/95.

Technical indicators on 1D time horizon send a sell signal suggesting that pair might demonstrate a short term bearish dip before picking up again.

Short traders could focus on weekly pivot (R2)/daily pivot (S1)/20 bar SMA at 0.8028/25, daily pivot (S2) at 0.8011, daily pivot (S3)/Bollinger band at 0.7999/96 and 20 bar SMA/pattern's support/Fibonacci retracement (61.8% of move since 29th of June) at 0.7974/67.

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Tags: British, EUR/GBP, Euro, Forex, Pound

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