EUR/GBP Forms a Price Bottom – Will it Stick?

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EUR/GBP Forms a Price Bottom - Will it Stick?

EUR/GBP has in a bearish market for about a year now. This trend is intact, but there are some signs that the pair is developing a bullish correction, at least for the short-term. Over the last 2-weeks, EUR/GBP found support at 0.7959 and showed resistance at 0.8025. During the 6/25 European session, price pushed above this 0.8025 resistance.
EUR/GBP 6/25 4h chart
(eur/gbp 4h chart, 6/25)
As the 6/25 US session gets underway, the current breakout is still a bit immature and weak. If there is a pullback, see if 0.80 can hold. If price can hold north of this level, traders will get more confidence to to buy the EUR/GBP. There would be upside risk toward 0.8060-0.8064, a previous support/resistance pivot area. Otherwise, if 0.80 fails to become support, the EUR/GBP is more vulnerable to being faded toward a bearish continuation scenario.

The 0.8060-64 area could also be reinforced by a falling trendline that you can see in the daily chart, going back to March. The daily chart shows a very bearish market but a bullish correction could be in order, especially with the RSI pulling up from 20.
eurgbp 6/25 daily chart
(eurgbp daily chart, 6/25)
A break above 0.8065 can open up the 0.8150 area, which was the June high. Again, this bullish outlook still needs a stronger clue to gain traction. The price bottom that just formed in the 4H chart will need to be confirmed by bulls keeping EUR/GBP above 0.80.

To contact the reporter of this story, email Fan Yang at fan@forexminute.com
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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.