EUR/GBP has been pacing back and forth between support at the .8300 handle and resistance around .8450.
Is it gearing up for a breakout soon?
Or are we about to see another bounce off these inflection points?
EUR/GBP 4-hour Chart by TradingView
Dovish European Central Bank (ECB) rhetoric appears to be weighing on the shared currency this month, despite some improvements in mid-tier data from the region’s top economies.
On top of that, the U.S. election results also seem to be adding downside pressure on expectations of higher tariffs and potential trade conflicts with Europe during another Trump presidency.
These factors have dragged EUR/GBP to the very bottom of its range visible on the 4-hour time frame just ahead of the Bank of England’s (BOE) monetary policy decision.
Are we about to see a bounce or a break from here?
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 British pound, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
A move below the range support near S1 (.8310) could pave the way for a selloff that’s the same height as the chart pattern, which spans around 150 pips. The 100 SMA is below the 200 SMA for now to hint that support is more likely to break than to hold, but the gap between the moving averages has narrowed to suggest a potential bullish crossover.
A bounce, on the other hand, could take EUR/GBP back up to the top of the range just below R1 (.8460) or at least until the area of interest near the pivot point level (.8380). Keep your eyes peeled for reversal candlesticks around current levels to gauge if the pair is likely to stay within its range.
Better stay on your toes for any top-tier market events and headlines that could impact overall sentiment!
