Earlier in 4-hour chart, EUR/GBP has formed ‘Hammer’ candle, which signals about a rising movement. In addition, this candle has formed close to the low of November 2008.
This combination of candles shows that the pair has been dropping before during a few days after the failed try of the breakout of the resistance level of 0.8775. However, having approached 0.8278, it reversed. It means that the bulls became active at this mark, having not let the bears fixate.
Now, EUR/GBP cannot break the resistance level of 0.8380, near which Fibonacci correctional level of 23.6 is placed. If the pair breaks out these levels, it will mean that this viewpoint is correct and a uprising motion to the resistance level of 0.8445 should be expected.
On the other hand, long positions should be closed after the breach of the support level of 0.8278, as it will lead to the reaching of new annual lows.
A day candle chart also signals about an upward movement because we observe “Hammer” candle. Therefore, it is advisable to keep opened long positions until the support line of 0.8278 is breached.
