A bear breakout from a shallow rising channel

• EUR/GBP is breaking out below the lower channel of a shallow rising channel.
• If the break holds, the pair will likely continue to decline.

EUR/GBP is breaking below the lower line of its rising channel in an attempt to break out lower.

The bearish trend evident during August’s steep decline is likely to reassert itself. A close below 0.8423 (September 10 low) would pave the way for further weakness to a downside target at 0.8406, the lower 0.618 Fib extension. Below this is support at 0.8385.

EUR/GBP 4-hour chart

Alternatively, if the breakout proves false, there is a chance that the shallow bullish channel will extend, with around 0.8460 as a possible bullish target.

A close above the high of 0.8464 (9/11 high) would be needed to confirm an upward breakout of the channel. Such a move could reach around 0.8477, the 0.618 Fibonacci (Fib) extension if the channel height were to extrapolate higher.