By: Mike Kulej

One of the currency pair that has been lacking significant attention recently is the EUR/GBP. This pair has been moving in ever-smaller price swings. So far this week the entire range has been only about 90 pips, very small when compared to previous periods.

That could change soon. On both the long term and the intermediate term charts, the EUR/USD is in a well defined down trend. Everything is pointing down, except for the latest price action. The ongoing contraction could be a precursor of a more directional move in near future.
As seen on the 4H chart (intermediate term), the price remains very close to the down trendline.

When the most recent minor highs are connected, the chart shows a triangle, with very little room left within it. This means that the price will move out of it, and soon, most likely with some momentum. Since the prevailing trend is bearish, chances are that the next swing will head lower. First objective would be 0.8140 and the next one perhaps a slow as 0.8000. On the other hand, an upside move could lift the EUR/GBP to 0.8230, 0.8280 and perhaps even 0.8362.