Is EUR/GBP gearing up for a short-term reversal?
Better keep your eyes on this neckline test, as a breakout could confirm a new trend for the pair!
EUR/GBP 1-hour Forex Chart by TradingView
Not even last week’s dovish BOE split seems to have been enough to stop sterling from rallying against the euro!
Pound traders could be crossing their fingers for an upbeat U.K. jobs release that could dampen December interest rate cut expectations, possibly resulting to more upside for the currency.
Or is the neckline still about to hold as support for now?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie 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 made a couple of failed attempts to bust through the .8820 resistance zone, finding support around the .8775 mark to create a double top on its hourly chart.
Price is hovering above the neckline and could be mulling a break lower, which could spark a downtrend that’s at least the same height as the chart pattern. If this happens, look out for the pair dipping to nearby support zones at S1 (.8760) then S2 (.8730) as these could still attract buyers.
On the flip side, reversal candlesticks at the support area could suggest that a bounce is in order, possibly taking EUR/GBP back up to its October highs near R2 (.8820) and beyond.
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.
