FX.co ★ dare.jammie | EUR/GBP

Chart W1 - currency pair EURGBP. In 2025, a large bullish reversal pattern formed - an ascending wedge, along with bearish divergence on the MACD indicator. Due to the significant timeframe, the signals are very strong accordingly. When the price was at its peak in 2025, I anticipated the beginning of a downtrend. There was confirmation from smaller timeframes, particularly bearish divergence on various daily indicators. Then there was a shift from support to resistance, gradually pushing the price down. Over many weeks, the price gradually descended, tested the broken level at 0.8733, and dropped from it. The target was eventually reached. Around the support level at 0.8627, there was an increased probability of a rebound upwards. Not only because of the level, but also because at that time, there was bullish divergence on the MACD indicator on a lower daily timeframe. It played out as expected, as the rebound upwards was successful. I assumed that we wouldn't go above the level of 0.8733 and that a continuation of the downtrend would follow. As seen in the retracement upwards, the price was pushed slightly above this level, thereby activating new buyers who saw the breakout and confirmation. However, this turned out to be a trap, and apparently, this upward retracement was the second wave before the third downward wave. I anticipate that the price will be gradually pushed down, with the potential target for the decline being the 161.8 level according to the Fibonacci extension applied to the first wave. Of course, I do not expect a straight vertical drop, but rather some retracements on smaller timeframes. Looking back at history, in the previous 2025 cycle, a similar pattern emerged, but for buying. There was an upward movement in January, then a downward correction, followed by the third wave up in March-April, during which there were two powerful large candles. Currently, I see a price rebound from the level upwards before the anticipated third wave. If this scenario unfolds, it will be the third within the third wave.

Chart of the H4 period. Selling is not advisable at the moment; we need a confirmation below the ascending trendline and the level of 0.8701. If entering a short position, it is preferable to do so on a test of this level from below after a breakout.