(MENAFN- Daily Forex)

• EUR/GBP continues to face selling pressure as it tests the 0.8750 support area, with the recent strong candlestick hinting at potential downside.
• A bounce could target 0.88–0.8850, but a break below 0.87 may signal a deeper decline.

The Euro has fallen pretty significantly during the trading session here on Wednesday to test the 0.8750 level. This is an area where I expect to see a significant amount of support, and therefore, it'll be interesting to see how this plays out.

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We are hanging around the 50-day EMA and previous resistance. So, it all lines up for a potential setup, but we'll have to wait and see. The size of the candlestick is pretty impressive, and it does suggest that perhaps the market is going to continue to see a little bit of downward pressure, but ultimately, I look at this as a market, so that if we can get a little bit of a bounce, then I think we will probably return back to the 0.88 level. Longer term, one would suspect that perhaps we could go to the 0.89 level based on the previous consolidation range and the measured move.

Longer-Term Perspective and Key Levels

However, when you look at this from a longer-term perspective, and I mean multi-year, the 0.89 level is an area that's been important a multitude of times. So even if we do turn around and rally from here, I'm not going to get married to the position. In fact, I probably would take profit somewhere near the 0.8850 level and see if we pull back.

EURUSD Chart by TradingView

That could be an excellent selling opportunity. We have already done that. So, the question is, did we put in a top? If we break down below 0.87, then I suspect we did, and we probably go much lower.

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