FX.co ★ The candlestick analysis of the EUR/GBP for 01/06/2010

On a 4-hour chart, EUR/GBP had formed “Bearish Engulfing” combination of candlesticks earlier, which signaled about a falling trend. In addition, this candlestick formed close to the resistance level of 0.8780-0.8790, where 50.0 Fibonacci correctional level was placed also.
This combination of candlesticks shows that earlier the price was rising during few days after failed try to break out the support level of 0.8490; however, it reversed, having approached the mark of 0.8775. It meant that the bears became active at this level having not let the bulls fix here.
Besides, the currency pair broke the support level of 0.8600.
As of now, EUR/GBP is likely forming Falling Three Methods, the combination of the bearish trend continuation. However, if the currency pair breaks out the resistance level of 0.8546 short positions should be closed as this breach will indicate the formation of “false bottom” and lead to the growth to 0.8650.