EUR/GBP has formed a bat pattern on the daily time frame targeting 0.85333 level. What we can see on the chart is the price in the downtrend channel. The price is just breaking below horizontal support level with a high chance of moving further down.
The entry point is around 0.84239, which is just close to the downtrend channel. This is also an area close to a confluence of support. The confluence of support consists of downtrend channel support and horizontal support.
With the support levels we could see price retracing back like it happened at the start of this month. Better option to enter into the trade is to wait until the price reaches a downtrend support line. There, we could see candlestick patterns which would give more confirmation to the bullish scenario.
Stop loss is below horizontal support which is also low for the price it did not break on the last attempt. That gives more strength to the support where the stop loss is less likely to be activated.
The first target point at 0.84957 is above the first resistance level but in the middle of the downtrend channel. And it is also in between two support/resistance lines which makes it more likely to be reached without any problems.
The second target is at 0.85333, close to the confluence of resistance where the downtrend resistance line crosses with the horizontal resistance line.
This puts pressure on the price, so I expect the price will have a hard time reaching this level. The better option is to target 0.85250. With a risk to reward ratio of 3.65, it is an excellent opportunity to prepare for a trade.