The EUR/GBP is posting a big reversal pattern after spending a few months stalling near a major support (161% extension of 2012 lows to 2013 highs). I originally tweeted the chart yesterday, and (full disclosure) have been building a long position in the pair the last week.

One of my favorite reversal patterns are descending (and ascending!) wedges since the initial reversal (thrust) tends to give the quickest push. Take a look at the chart below:

Many traders attribute the EUR/USD rally to just USD weakness. I think it is a combination of both USD weakness and EUR strength on many crosses, like the EUR/GBP, EUR/AUD, EUR/CHF, etc. Keep in mind the EUR/GBP is one of the more liquid and highly traded pairs in the world of FX, which is just adding fuel to the EUR “squeeze” fire.

Blake Morrow

Chief Currency Strategist, Wizetrade

Disclaimer: I am long the EUR/GBP, and I am looking to stay long for the days to come.