The euro has been sliding against the British pound since mid-April, but EUR/GBP may be nearing a key inflection point that could spark a longer-term bounce.
We’re zooming into the 4-hour chart to see if the tides are about to turn!
EUR/GBP 4-hour Forex Chart by TradingView
Sterling got a boost earlier this week from hotter-than-expected UK inflation, but the rally quickly faded. Some traders locked in profits, while others likely focused on Bank of England (BOE) officials downplaying the staying power of high prices.
At the same time, the euro is holding up as a go-to alternative when the U.S. dollar softens, especially with improving global trade conditions and talk of a potential Russia-Ukraine peace deal.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the euro and the British pound, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
EUR/GBP has been in a downtrend since mid-April, but it looks like it just bounced from the .8400 psychological level.
pAs you can see, that are aligns with a key Pivot Point at .8416 and the 78.6% Fibonacci retracement of April’s rally. It also sits near a trend line that’s held since March, which could attract buyers betting on a reversal.
If the pair climbs above .8450 and holds, bulls could push for a move toward the .8500 mark or even .8600.
On the flip side, failure to stay above the trend line might signal that bears are still in control, with .8300 to .8350 back in play.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.