Check out this neat confluence of support levels on the 4-hour time frame of EUR/GBP!
Will it bounce or break this time?
Here are the levels I’m watching:
Looks like this trend line is still holdin’ like a boss!
EUR/GBP has been cruising above this rising support area that’s been holding since mid-April this year. Another test is taking place, and technical indicators are pointing to a bounce.
For one, the 100 SMA is above the 200 SMA to indicate that the path of least resistance is to the upside or that support is more likely to hold than to break.
The moving averages even line up with the trend line to add to its strength as support. To top it off, these indicators span an area of interest or former resistance, too!
Stochastic is on the move down but already dipping into the oversold region to signal that sellers might take a breather soon. Turning higher would mean that buyers are about to take advantage and possibly push EUR/GBP back up to the latest highs.
Just yesterday the BOE hiked interest rates by a measly 0.25% so there might be some disappointment among pound bulls. Meanwhile, the ECB called for an emergency meeting to share the central bank’s plans to limit bond spreads.
There’s not much in the way of top-tier events from both the eurozone and the U.K. for the rest of the week, though, so the pair might simply take cues from market sentiment. Good luck out there!
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