The Euro had been trouncing the Pound since mid-November last year. Lately, the momentum in the pair has waned, and recent price action portends a reversal that may test the bottom of the range at .7700.
The candlestick pattern is a bearish evening star. This pattern is a bearish reversal pattern, but two concerns may make the pattern fail. The bullish day following the pattern is less than ideal. A selloff would have demonstrated bearish conviction. The second concern is that the bearish portion of the pattern did not close below the 5/3 low. While not required for the pattern this also would have demonstrated bearish conviction.
The 50% Fibonacci retracement of the 4/7 high and the 4/26 low is .7927 where the center of the bearish evening star reversal of 5/4 resides. If price can stay below this level, a race to the .7700 area is very possible.
The candlestick pattern is a bearish evening star. This pattern is a bearish reversal pattern, but two concerns may make the pattern fail. The bullish day following the pattern is less than ideal. A selloff would have demonstrated bearish conviction. The second concern is that the bearish portion of the pattern did not close below the 5/3 low. While not required for the pattern this also would have demonstrated bearish conviction.
The 50% Fibonacci retracement of the 4/7 high and the 4/26 low is .7927 where the center of the bearish evening star reversal of 5/4 resides. If price can stay below this level, a race to the .7700 area is very possible.