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 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 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 firstname.lastname@example.org
Previous: Gold (XAU/USD) – Technical Conditions Suggest an Imminent Pullback (6/25)