EUR/GBP is currently challenging a major resistance level following a notable rally earlier this week. So, are we poised to see this pair continue its longer-term trend? Let’s dive into the 4-hour chart to see what’s unfolding:
Recently, the Bank of England (BOE) announced its latest policy decisions. While the interest rates were left unchanged as anticipated, an interesting twist came when three members, including the Deputy Governor, voted for a 25 basis point rate cut. The meeting minutes also highlighted some concerns about economic growth, despite the persistently high prices, which adds another layer to the current market dynamics.
On the flip side, the euro is holding its ground rather well, thanks in part to mid-tier data from the region that aligns with the European Central Bank’s (ECB) dovish stance. But the million-dollar question remains: how far can EUR/GBP advance before the selling pressure returns?
As a savvy trader, staying on top of the economic calendar is crucial. Understanding the fundamentals behind the euro and the British pound can provide essential insights into possible directional biases and volatility trends.
EUR/GBP recently rebounded from its .8225 December support level, climbing towards the .8300 psychological mark. This is tantalizingly close to the R1 (.8352) Pivot Point line, not to mention the upper boundary of a descending channel that’s been shaping the market since mid-September.
At present, the pair is hovering near the 4-hour chart’s 200 Simple Moving Average (SMA), a region that has captured the attention of both bulls and bears since November. Keep an eye out for bullish candlestick formations that could push EUR/GBP past the .8300 level. If successful, this move might set the stage for a channel resistance retest or even a journey towards the R1 Pivot Point.
However, if EUR/GBP veers south around .8300, it might signal a resume of its longer-term downtrend. Look for bearish candlesticks that could usher in a wave of selling pressure, potentially nudging the pair back down to the .8225 December support level.
Regardless of which direction the market takes, stay vigilant for top-tier catalysts that could sway overall market sentiment. And remember, always practice prudent position sizing when engaging in any trades!
