The currency pair has decreased in the last days as the rate has hit a very strong resistance level, the current retreat was somehow expected after the last impressive increase, the rate has broken above a medium term descending trend line, we’ll have to wait for a confirmation until we go long on this pair. Surprisingly or not, the pair has decreased after the release of the Euro-zone and UK economic data, the United Kingdom’s Final Gross Domestic Product has increase by 0.4% in the first quarter, while the Current Account has increased a little from -34.0B to -32.6B, has disappointed a little as the estimate was -27.3B, moreover the Index of Services rose by 0.5%. The Pound wasn’t too impressed by the Revised Business Investment has decreased by 0.6%, exceeding the 0.4% estimate.
The Euro has decreased a little as the Euro-zone economic data have come mixed, the German Retail Sales have increased by 0.9%, more than the 0.7% estimate, but unfortunately the German Unemployment Change has decreased to -6K in May, moreover the French Consumer Spending has decreased by 0.7%, much more compared to the 0.1%. Meanwhile the CPI Flash Estimate has increased by 0.1%, exceeding the 0.0% growth prediction, the Core CPI Flash Estimate has increased by 0.9%, more than the 0.8% forecast. The Euro could increase again versus the Pound as the UK’s currency remains under massive selling pressure after the Brexit referendum, the Cable could drop much deeper versus all its rivals.
Remains to see what will happen, but the perspective remains bullish on the short term, even if the minor retreat will continue, the rate could retest a major support before will start to increase again.

You can see on the Weekly chart that the price has jumped much above the medium term downtrend line, is located also much above the 61.8% retracement level, signaling that the correction phase could resume with major upside target at the 100.0% level, somewhere at the 0.8820 psychological level. The outlooks remain bullish because the price is trapped inside the ascending pitchfork’s body, between the median line and the upper median line, the rate has touched the upper median line (uml), but wasn’t able to jump above this level, has failed also to retest the 0.8398 horizontal resistance. A rejection here will send the rate lower in the coming days, personally I would like if the price will decrease to retest the median line (ml) of the ascending pitchfork, we’ll have a perfect buying opportunity if the rate will test the confluence area formed at the intersection of the median line with the downtrend line.

I’be added also a short ascending pitchfork, the rate is trading above the upper median line of the minor ascending pitchfork, has edged higher in the last hours and could challenge again the 76.4%retracement level and also the previous high from 0.8378 level. A jump above the 76.4% retracement level followed by a short consolidation will attract more buyers, which will lead the price toward new peaks.

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