EUR/GBP has been cruising with lower highs connected by a falling trend line since November last year.
Will it bounce off resistance again? Or is a fresh uptrend about to happen?
Check out these inflection points on the 4-hour time frame!
EUR/GBP 4-hour Forex Chart by TradingView
The Bank of England’s “hawkish cut” back in December has kept sterling supported against the euro, as traders appear to be predicting that the U.K. central bank could end its easing cycle soon.
Meanwhile, the European Central Bank’s neutral stance continues to be questioned, especially since some data points from the region are reflecting weak spots lately.
Are resistance levels likely to keep holding for EUR/GBP?
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 the British pound, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
EUR/GBP is keeping its head above the .8650 minor psychological level so far, possibly going for a quick correction to nearby Fibonacci retracement levels before gaining traction on its slide.
The pair is closing in on the 38.2% Fib near the trend line resistance, just between R1 (.8690) and R2 (.8710). Reversal candlesticks at this region could suggest that bears are trying to regain control, potentially putting price back on track towards sliding to the swing low or the next support level at S2 (.8630).
A larger correction could still find a ceiling at the 50% Fib near the 200 SMA while the 61.8% level could be the line in the sand for a bearish pullback. Look out for long green candles busting through these resistance zones, as a return in bullish momentum could take EUR/GBP to R4 (.8750) then R5 (.8770) with these top-tier U.K. data releases.
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!
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