If you’re looking to trade a non-dollar pair these days, this potential reversal pattern brewing on the daily chart of EUR/GBP may be worth a look.
Is this double bottom pattern ready for completion?
Check out these long-term inflection points!
EUR/GBP: Daily
EUR/GBP Daily Forex Chart Faster with TradingView
Diverging monetary policy paths for the European Central Bank (ECB) and Bank of England (BOE) appear to have given the shared currency an advantage over sterling last month.
While the ECB is under pressure to hike in a stagflationary environment, BOE policymakers don’t seem inclined to adjust interest rates just yet.
To top it off, safe-haven flows from geopolitical uncertainty are also leaning in favor of the euro versus the pound, which has been joining some risk rallies lately.
EUR/GBP made another strong bounce off the .8650 minor psychological support and is headed towards the neckline resistance around .8775, forming a double bottom on its daily time frame.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!
A break above the neckline could confirm sustained upside momentum, possibly lifting the pair up to the next bullish targets at R1 (.8810) then R2 (.8890).
On the other hand, reversal candlesticks at the resistance zone could set off another drop to the lows near S1 (.8640) or at least until the pivot point level (.8710).
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.
Promoted: The Analysis & Strategy are only half the Battle; Your Mindset is the Rest.
Today’s chart art zooms in on EUR/GBP’s reversal formation. But as any pro will tell you, even the cleanest trend-following setup can fall apart if the trader doesn’t stay disciplined when price starts testing the level.
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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.
