EUR/GBP: Société Générale says a downward reversal is forming

Societe Generale believes that the EUR/GBP is about to turn around after a long bullish phase.

"Having observed a steady upward trend for a year, the EUR/GBP almost tested the highs from 2013 at 0.8750 / 0.8820 and completed a 61.8% retracement of the previous 8-year downward cycle.

Last week, the pair formed a top and a bearish engulfing pattern is forming, suggesting that the bullish momentum is declining.

These charts, after having reached the projections of the fifth wave, indicate that a correction is coming. 0.8750 / 0.8820 is currently limiting the rise. A retracement towards last month's dips at 0.83 / 0.8250 is more likely. The multi-year channel at 0.81 / 0.80 remains a key level."