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Will EUR/GBP Recover Higher?

November 25, 2021

  • EUR/GBP started to decline after testing resistance near 0.8600.
  • Bullish trend line broken at 0.8530.

The Euro, British Pound pair started to decline from near 0.8600. Multiple support levels were broken, as well as both the 100-MA (red) and 200-MA (blue).

 

EUR/GBP 4-Hour Chart (Trend: BEARISH)

On the 4-hour chart, after breaking below both the 100-MA (red) and 200-MA (blue), the quote tested support near 0.8380 multiple times before consolidating higher. The quote is currently trading within a range between 0.8380 and 0.8420.

For the pair to turn bullish, the quote will first need to break above the 0.8420 resistance level. Above this there is further resistance at 0.8460, which is also close to the 38.2% Fibonacci retracement level of the downward move from the swing high of 0.8594 to the swing low of 0.8379. Beyond this there is further resistance near the 0.8510 level.

In contrast, if the pair continues bearish, the quote will need to retest, and break below the 0.8380 level. This could lead to momentum taking the quote down towards 0.8300, a level not seen since February 2020. 

 

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