FX.co ★ EUR/GBP candlestick analysis for February 15, 2011

The EUR/GBP currency pair is approaching the support level 0.8389. In case it is broken, long positions should be closed as it will target the pair to 0.8332.
Earlier on a 4-hour graph the EUR/GBP has formed candlestick combination Piercing Line, which indicates upside movement.
This candlestick combination shows that the currency pair made a strong downside movement after an unsuccessful attempt to break the resistance level 0.8671. However, it reversed near the support level 0.8389. It means in its turn that the bulls activated on this level and the bears could not solidify here.
Upside movement is supported by 1) oversold RSI; 2) bullish divergence on the Stochastic Oscillator.
Break of the resistance level 0.8498 will prove this viewpoint. In this case upside movement to 0.8671 should be expected.
Stop order should be placed slightly below 0.8389 as a break of this level will target the pair to 0.8332.