EUR/GBP has formed lower highs and slightly lower lows to consolidate inside a falling wedge pattern.
Is it about to break out soon?
Take a look at these nearby inflection points I’m watching on the 4-hour chart!
EUR/GBP 4-hour Forex Chart by TradingView
Dovish ECB expectations and geopolitical tensions appear to be weighing heavily on the common currency these days, keeping EUR/GBP cruising lower inside its wedge pattern that’s been holding since mid-January.
Price has just bounced off support, though, and may be in for a pullback to the nearby resistance zones.
Are sellers looking to jump in anytime soon?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the euro and British pound, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
The 38.2% Fibonacci retracement level coincides with an area of interest or former support zone that could hold as resistance, as well as the top of the wedge. A larger correction could still test the 50% Fib that lines up with R1 (.8320) and the 100 SMA dynamic inflection point.
On the subject of moving averages, the 100 SMA is below the 200 SMA to suggest that the selloff is more likely to resume than to reverse, possibly taking EUR/GBP back down to the swing low at .8271 or the wedge support near S1 (.8250).
Just keep your eyes peeled for any breakout candlesticks in either direction, as these could point to a move that’s roughly the same height as the wedge formation or around 200 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!
