EUR/GBP Reviving its Downtrend Following the BoE Statement

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EUR/GBP Reviving its Downtrend Following the BoE Statement

The EUR/GBP has been consolidating for about a week, but looks poised to continue the downtrend after the price action in the past couple of sessions.

After rallying from 0.7405 to 0.7590, EUR/GBP retreated. It respected the 100-period SMA in the 4H chart, and a previous support area, thus maintaining the bearish bias. EUR/GBP was stalling at 0.7450 ahead of the BoE statement, but was unable to break above 0.75. Now it looks to be retreating again.

The 0.75 area was a previous resistance and where the 50-period SMA resided. The fact that EUR/GBP respected this as resistance shows that bears are back in control. The pair looks poised to run to 0.74-0.7495, with risk of breaking lower, upon breaking below 0.7450. Note that this week’s price action broke below a rising flag pattern, and today’s price action appears to be confirming this bearish breakout.

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.