FX.co ★ EUR/GBP candlestick analysis for May 24, 2010

On a 4-hour chart EUR/GBP a candlestick combination “Bearish Engulfing” has been formed beforehand, which is signaling a downfalling movement. Moreover, this candlestick has been formed near the resistance level of 0.8780 - 0.8790, where Fibonacci correctional level of 50.0 is positioned. This combination of candlesticks shows that earlier the price was growing for several days after failing to break through the support level of 0.8490, nevertheless, after getting closer to the mark of 0.8775 it pulled back. This in its turn means that the bears have activated at this level without giving the bulls to fixate here.
It is expected that the pair will decline to 0.8600. If this support level is broken a descend to 0.8494 should be waited for.
On the other hand, if the pair gets through the resistance level of 0.8790, the opened before short positions should be closed as it will target EUR/GBP to 0.8870, where a Fibo correctional level of 61.8 is located.