Societe Generale’s Kenneth Broux highlights that EUR/GBP is trading within a Head and Shoulders pattern, implying potential downside if key levels give way. A sustained break below 0.8610 is seen as crucial for confirming a deeper decline, with 0.8730/0.8740 acting as near-term resistance and 0.8535 as the next downside objective within a broader descending channel.

Head and Shoulders signals downside risk

"EUR/GBP has evolved within a Head and Shoulders pattern, which points towards potential downside."

"However, a break below the neckline at 0.8610 will be crucial for confirmation."

"If EUR/GBP establishes below 0.8610, the downtrend may extend."

"Recent pivot high around 0.8730/0.8740 remains a key resistance in the short-term."

"The next objective could be located at projection of 0.8535, which is also the lower limit of a multi-month descending channel."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)