Nick Nasad
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EUR/GBP Smashes Through 0.8580, A Sign of Bearish Continuation

The EUR/GBP has been in a tight sideways consolidation for the past 3 sessions after sliding from a high near 0.8768 as expectations around the BOE have shifted.

As we can see, today saw the support level at 0.8580 give way, which puts us back into the levels we saw during a much wider ranging action throughout mid-May to early July. The break was particularly strong which meant that after a strong batch of orders protecting the barrier, there wasn't much resistance on the way down.

As a result we tested an important support trendline in the pair (which can be more easily seen in the daily timeframe).

The bottom line here is likely that this break ushers in a continuation of the downswing started on August 1st, and it may be prudent to look for chances to fade rallies.

- Nick