EUR/GBP has been consolidating on its long-term and short-term time frames.
Are we about to see a breakout soon? Or is the pair likely to keep moving sideways?
Check out these inflection points on the 4-hour chart!
EUR/GBP: 4-hour
EUR/GBP 4-hour Forex Chart Faster with TradingView
Stagflation risks are weighing heavily on the European region these days, as growth remains feeble while price pressures continue to soar due to the ongoing US-Iran war.
The ECB, in particular, is seeing a divide among policymakers when it comes to tightening monetary policy to combat inflation versus exercising patience in waiting for the economy to stabilize.
Because of that, EUR/GBP remains stuck inside a descending triangle pattern that has been holding all month.
Which way could it break out?
EUR/GBP is hovering around its pivot point level (.8700) which is right smack in line with a major psychological level. The pair is currently testing the triangle support, and a break lower could clear the path for a selloff to the next downside targets.Remember that directional bias and volatility in EUR/GBP are often driven by economic data and monetary policy. If you haven’t done your homework on the euro and the British pound, it’s time to check the economic calendar and stay updated on daily fundamental news.
Keep your eyes peeled for long red candlesticks closing below the triangle bottom and S1 (.8680), as sellers could set their sights on S2 (.8660) then S3 (.8640) or all the way down to the range support around S4 (.8630).
The 100 SMA is still above the 200 SMA and is increasing its gap, though, so stay on the lookout for a clean break above the triangle top that could pave the way for a test of the longer-term range resistance near R2 (.8740).
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: Clean Setups Are Easy; Staying Disciplined Isn’t.
EUR/GBP is consolidating in a triangle formation, with a breakout in either direction still possible. But as any trader learns the hard way, even the best-looking setup can fall apart without the discipline to stick to the plan.
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