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The pound is hitting historic lows against its major counterparts!

Will it mean an upside breakout for EUR/GBP?

Let’s check out the daily chart!

EUR/GBP: Daily

EUR/GBP Daily Forex Chartq

EUR/GBP Daily Forex Chart

In case you were too busy minding your equities portfolios, you should know that forex players have been hating on the British pound since Friday.

See, the government announced a “mini budget” plan that involves a lot of tax cuts that will mostly be funded by public borrowing.

Not only can these tax cuts fuel inflation, but it will also plunge the government deeper into debt territory.

GBP has taken heavy hits across the board and EUR/GBP was no exception.

The pair was trading around .8750 levels before Friday and Monday’s volatility boosted the pair all the way to the .9300 levels.

Can GBP bears maintain their upswing?

Take note that the .9200 – .9300 zone has worked as resistance at least FIVE times since 2017.

Meanwhile, Stochastic is flashing an overbought signal on the chart.

An improvement in appetite for GBP could drag EUR/GBP back down to its sub-.9000 mid-range levels.

Don’t place too much weight on technical analysis though!

Unless the Bank of England (BOE) or the U.K. government say something to improve the economy’s uncertain conditions, then traders will likely keep buying the “safe haven” EUR and sell GBP.

If we don’t see changes in market sentiment, EUR/GBP could break above its established range resistance and head for areas of interest like .9500.

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.