Nathan BatchelorThe euro currency is starting to turn lower against the British pound after the pair recently met strong selling interest from the 0.0900 area.
EUR/GBP technical analysis shows that a bearish head-and-shoulders pattern is close to being activated on the lower time frames.
EUR/GBP medium-term price trend
The EUR/GBP is starting to turn sharply lower after sellers moved in from the technically important 0.9000 resistance level last week.
EUR/GBP analysis shows that sellers are likely to target a bearish breakout below the 0.8850 support level.
The daily time frame shows that technical selling will increase towards the EUR/GBP pair once the 0.8850 support level is overcome
The Parabolic SAR, which is a key trend indicator, shows that once the 0.8850 level is broken, heavy medium-term selling pressure should increase.
Medium-term analysis shows that bears may look to sell the EUR/GBP pair towards its key 200-day moving average, around the 0.8700 level.
The daily time frame also shows that an extremely large head-and-shoulders pattern will form if price reaches the 0.8680 level.
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EUR/GBP short-term price trend
EUR/GBP technical analysis shows that the pair has a bullish bias over the short term while the price trades above the 0.8790 level.
The four-hour time frame currently shows that a bearish head-and-shoulders pattern has formed.
Looking more closely at the bearish pattern, a move under the 0.8900 level is required to activate the bearish pattern.
According to the size of the bearish pattern, the EUR/GBP pair could fall towards the 0.8800 level over the short-term.
Only a sustained move above the 0.9000 level may cause traders to turn bullish towards the EUR/GBP pair.
EUR/GBP technical summary
EUR/GBP analysis shows that bearish head-and-shoulders patterns will be activated if the price moves below the 0.8900 level. The 0.8700 level remains the wider bearish target at this stage.
