EUR/GBP is still consolidating on its long-term time frame, as it bounced off the triangle bottom and is now setting its sights on the top.
Will sellers return soon?
Or will euro bulls keep charging enough to break higher?
EUR/GBP: Daily
EUR/GBP Daily Forex Chart Faster with TradingView
The European Central Bank (ECB) hiked interest rates last week, and officials are suggesting scope for further tightening if inflationary pressures stay elevated.
On the flip side, the U.K. CPI report reflected weaker price levels and appears to have dampened expectations for Bank of England (BOE) rate hikes.
Can EUR/GBP keep climbing from here?
EUR/GBP is hovering just above the descending triangle support around S1 (.8610) as it attempts to gain additional bullish momentum for a test of the next resistance levels at the pivot point (.8670) then the triangle top near the .8700 major psychological level.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 British pound and the euro, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
The 100 SMA is below the 200 SMA, though, so the path of least resistance could be to the downside. In other words, the ceiling is more likely to hold than to break, possibly even sending the pair back down to the triangle bottom.
If support gives way, keep an eye out for a selloff to the nearby downside target at S2 (.8560). On the other hand, sustained upside momentum could spur a break above the triangle top and further gains until the next bullish targets at R1 (.8730) then R2 (.8780).
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.
Related Lesson: Hawkish vs. Dovish Signals
This article touches on how ECB and BOE policy signals are pulling EUR/GBP in different directions, and if central bank language isn’t something you’ve studied closely, it’s worth a closer look. Premium members can read our lesson:
📖 Hawkish vs. Dovish: How to Read Central Bank Language
Reading this helps you understand what hawkish and dovish signals actually mean, how to identify where a central bank sits on the policy spectrum, and why a single speech or rate decision can move a currency pair more than the chart setup suggests.
And if you’re not a Premium subscriber yet, now’s a good time to sign up.
With Babypips Premium, you get full access to School of Pipsology lessons that help you understand not just what the chart is showing, but the central bank dynamics and policy signals driving the move.
