EURGBP made a nice continuation lower from wave iv correction. As we can see on the 4h chart, blue wave iv correction seems to have finished its consolidation at the 0.8578 mark, from where a nice drop towards the 423.6 Fibonacci ratio occurred. This drop represents the final wave v, with a contracting structure, which gave us an idea about an ending diagonal. As we know an ending diagonal is a powerful reversal pattern, which can, after its completion, make a strong reversal higher, in many cases towards the starting point of the pattern as in our case towards the 0.8578 level.
As explained above, an ending diagonal is a reversal pattern and as we see on the updated chart we can see that the price jumped higher overnight, probably into the start of a probable three wave corrective move or a possible new impulse, that could in weeks ahead take the price higher. For our minimum expectations, we believe the price will continue to the 0.8596 level.
EURGBP, 4h
Ending Diagonal Pattern:
