FX.co ★ The candlestick analysis of the EUR/GBP currency pair for May 11, 2011

On a four-hour EUR/GBP chart the candlesticks signal falling.
Firstly, after a strong plunge the currency pair recoiled which was curbed by the resistance level of 0.8807, thereafter a candlestick “Shooting Star” with a long shadow formed. Secondly, during the recurrent uprising movement the resistance level around 0.8750 worked and the candlestick “Shooting Star” was formed again. Thirdly, the “Long Day” development closed the gap with which the EUR/GBP opened on Monday; this is a bearish signal, being confirmed later. And finally, as it is seen on the chart, the pair got through the strong correctional Fibonacci level 61.8, and continued with a slight correction.

Although, a 24-hour chart gives a bullish signal, as earlier a candlestick “Morning Star” has formed, being followed by a deep downfall. As it was sated above, the increase can be curbed in the area of resistance 0.8840 - 0.8860, where a strong level of Fibonacci correction 61.8 is positioned. Moreover, here on a 24-hour chart there is a formation of the candlesticks “Hanging Man”.