EUR/GBP Price Forecast: Euro vs GBP Tests Key Reversal Levels
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EUR/GBP Technical Analysis
- Bulls pull back from over a decade high
- Will bulls give up control?
EUR/GBP – Rebounded From 0.9500 Handle
On March 19, EUR/GBP took off to 0.9500 -its highest level in eleven years. The price retreated after, as some bulls seemed to cut back. Nevertheless, the market closed on Friday the weekly candlestick in the green with 1.5% gain.
This week, the Relative Strength Index (RSI) fell from 69 to 53 signaling a weaker uptrend momentum.
EUR/GBP DAILY PRICE CHART (Nov 1, 2018 – Mar 27, 2020) Zoomed Out
EUR/GBP DAILY PRICE CHART (Nov 1 – Mar 27, 2020) Zoomed In
Looking at the daily chart, we noticed this week more bulls have eased up allowing EUR/GBP to declined further. Today, the pair has moved to a lower trading zone 0.8832- 0.9015.
Thus, a close below the high end of the zone could send EURGBP towards the low end of it. Further close below that level could extend the selloff towards 0.8687. In that scenario, the weekly support level underlined on the chart (zoomed in) should be watched along the way.
In turn, any failure in closing below the high end of the zone indicates a possible come back from the bulls and push towards 0.9500. Further close above that level could mean more bullishness towards 0.9803. That said, the psychological levels printed on the chart should be monitored.
EUR/GBP FOUR HOUR PRICE CHART (Mar 10 - Mar 27, 2020)
From the four- hour chart, we noticed that on Monday EUR/GBP U turned and created the second top of double top pattern (reversal formation). Today, the price has broken below the neckline located at 0.8996 eyeing a test of 0.8504.
A break below 0.8815 would generate another bearish signal. This could send EURGBP towards 0.8716. Although, the weekly support level marked on the chart should be considered. On the flipside, any violation of the neckline would negate the pattern. Additionally, a break above 0.9150 could push the pair even higher towards 0.9388. Yet, the daily resistance level underscored on the chart should be kept in focus.
See the chart to figure out more about key technical levels the price would encounter in a further bullish/ bearish scenario.
Written By: Mahmoud Alkudsi
Please feel free to contact me on Twitter: @Malkudsi
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.