Candlestick analysis of the EUR/GBP for 29/11/2010

On a daily chart the EUR/GBP rebounded again after it failed to test the Fibonacci correction level 61.8. The viewpoint on the currency pair remains bearish, as the downside movement is still presented.
As it was mentioned before in case the level of 0.8423 is broken through we expect the decline to support level of 0.82.
Earlier on a daily graph the EUR/GBP has formed the combination of candlesticks Bearish Engulfing that indicates the downwards motion.
This combination of candlesticks shows that the currency pair was decreasing after it could not breakout the support level of 0.8067. However, having come closer to 0.8950 the pair reversed. This means that the bears activated here and did not allow bulls to solidify.

The breakthrough of the Fibonacci correction level 38.2 and support level of 0.8626 confirms this point of view.
It is recommended to place the stop orders slightly above 0.8600 since the breakout of this level will target the currency pair to 0.8821.

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