FX.co ★ EUR/GBP Supply & Demand Analysis July 25, 2011

EUR/GBP has broken the bullish channel July 7 this month with a very bearish momentum.

Then we have a retest for the broken channel and the supply ( Resistance ) area marked on the chart.

This Supply area extends between 0.8860 - 0.8950.

Also it's important to notice the price action towards this area which was a bearish candlestick with a long upper tail.

Also the bearish price action is manifested here on the 4H chart.

Bearish Engulfing candlestick appeared at the supply level indicating strength of the bears here.

This could be the end of the bullish retracement and resume of the bearish movement after break of the bullish channel.

The next demand levels that will be our targets are 0.8720, 0.8687 then 0.8607.

Break of 0.8950 cancels the bearish view and opens the way up to 0.8933 initially.