EUR/GBP has pulled back down to a MAJOR area of interest!
Are we looking at the best place to jump into EUR/GBP’s longer-term uptrend?
We’re checkin’ out the 4-hour time frame:
EUR/GBP 4-hour Forex Chart by TradingView
Improved risk sentiment and a bit of profit-taking after the anticipated U.K. Autumn Budget release pushed traders back into the British pound over the last few days.
The euro, meanwhile, is having a tougher time holding its ground. Risk-taking flows seem to be sliding toward the “riskier” currencies, and a run of mixed mid-tier Euro Area data is not giving EUR much help.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie 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, which has been climbing inside an ascending channel pattern since mid-August, has slipped from the .8860 zone and is now trading closer to the .8750 area.
As you can see, that level lines up with the 61.8% Fibonacci retracement of the October upswing, the S2 Pivot Point at .8743, the 200 SMA, AND the bottom of the uptrend’s support.
What makes the setup interesting today is the long wicks forming around .8750, a sign that buyers are stepping in at this area.
We’re watching for bullish candlesticks and steady trading above .8750, which could power a move back toward the .8860 previous highs or even new swing highs.
But keep an eye out for red candles and sustained trading below the channel support, since that could set up a slide toward the .8700 major psychological level or the .8680 previous support.
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.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
