EUR/GBP is currently correcting within a medium-term downtrend. The currency pair has risen to partially fill a price gap and is likely to fill the remaining gap in the future. A break below the low of June 25 would indicate a continuation of the prevailing downtrend.
After hitting a low of 0.8398 on June 14, EUR/GBP has retraced back. The pair seems to be following a medium-term downtrend, suggesting that the downtrend is likely to resume once the correction phase ends. A break below 0.8431, the low of June 25, would confirm this resumption.
The initial target for a downward move is the low of June 14 at 0.8399. However, there is a possibility of further upside movement as the price has risen to fill a gap. Price gaps are usually filled eventually, indicating a risk of more upside potential as the price fills the remaining gap.
On the 4-hour chart, the top and bottom points of price gaps often act as support and resistance levels. If the price fills the gap and reaches the top at 0.8490, there is a chance it could encounter resistance and reverse its direction.