EUR/GBP made it all the way to the top of its range visible on the 4-hour time frame, and it looks like the pair is deciding between going for a bounce or a break.
Which way will it go from here?
EUR/GBP 4-hour Forex Chart by TradingView
With ECB policymakers suggesting that the central bank is near the end of its easing cycle, the shared currency has managed to stage a steady climb for the most part of September.
On the flip side, a more dovish Bank of England MPC vote in last week’s meeting has kept the U.K. currency on the back foot.
Can EUR/GBP go for a bullish range breakout?
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!
The pair is hanging out at the range resistance around the .8750 minor psychological level, possibly setting its sights back on the nearby support levels at the pivot point (.8690) then S1 (.8660) should the ceiling hold.
Sustained bearish momentum could drag EUR/GBP back down to the bottom of its range around the .8620 levels, which are above S2 (.8600) and a major psychological mark
On the other hand, a break above the range resistance and R1 (.8760) could set off a rally that’s the same height as the rectangle formation, which spans approximately 150 pips.
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.
