EUR/GBP Is Developing A Barbed Wire Pattern On The W1 Time Frame

Usually when we see such a pattern the recommendation is not to touch the platform and not to trade before there is more clarity on the charts.

In this case, however, the situation appears quite clear. EUR/GBP has once broken out below the support zone around 0.8750 – 0.87330 but it has rebounded to test the resistance marked by the middle line of the Bollinger Bands indicator on the W1 time frame. Such development can be seen often across instruments and time frames. And this is where the barbed wire pattern has been developing for a fourth week. As we all know, the larger the time frame is, the longer and larger the movement afterward will be. 

In this case, in my opinion, the move will be to the downside to 0.8450-0.8430.

The alternative scenario is for a rally to 0.9000 and 0.9100, but for the moment I think the first scenario is more probable.