Is EUR/GBP Turning Bullish?
EUR/GBP has been a choppy mess, with no indication of direction. To me, the price structure of the consolidation hinted at a bearish breakout, but price has held above a key neckline at 0.83. Now it is threatening to turn bullish.
EUR/GBP Daily Chart
(click to enlarge)
At the crossroads; breakout scenarios:
- The EUR/GBP is simply in consolidation.
- If it broke below 0.83, we might be able to say that it has turned bearish with at least 0.80 in sight.
- EUR/GBP also has resistance around 0.86, we might want to anticipate resistance.
- 0.83 is a more important support than 0.86 is a resistance.
- Still we can see that around 0.86, price is being challenged by a falling trendline, and the 200- and 100-day simple moving average.
- A break above 0.86 does open up the highs around 0.88. But we might need to see a break above 0.88 to see that EUR/GBP is bullish, which would have at least the 0.92 level in sight, though 0.90 will likely add some volatility and resistance.
- If the market stays above 0.85 on a subsequent pullback, then the bullish outlook is very likely because it would reflect a market with weak bears.
- However, if price holds under 0.86 this week and falls below 0.85, I would keep the focus on 0.83. I would also think that 0.83 will eventually break so I wouldn't rely on it for support next time around.