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EUR/GBP - Flag Pattern Breakout Scenario

When you look at the 4H EUR/GBP chart, you can see a bearish market based on price action and the alignment of the moving averages.

(eurgbp 4h chart, 6/26)

For a couple of weeks now, the pair has been trading in a slightly bullish channel, which can be interpreted as a flag pattern within a bearish trend.

A break below the 6/26 session low at 0.7982 might do the job in which case we have a bearish continuation scenario.

(eurgbp weekly chart, 6/26)

The weekly chart shows that there is still room to fall until the 2012 low at 0.7764. The thing is EUR/GBP in the weekly chart has been in a sideways market since 2010, so the further away from the 0.84 area where the 200-weekly SMA resides, the more likely there will be a bullish correction.