EUR/GBP is challenging a key resistance level following a significant upswing earlier this week.
Could the pair be set to continue its longer-term trend?
Here’s what we’re observing on the 4-hour chart:
EUR/GBP: 4-Hour Chart Analysis
The EUR/GBP pair has captured attention after bouncing from its December support level of 0.8225 to test the 0.8300 psychological handle.
This surge comes on the heels of significant updates from the Bank of England (BOE), which kept interest rates steady as expected. However, three policymakers, including the Deputy Governor, voted in favor of a 25-basis-point rate cut. The BOE's meeting minutes also highlighted concerns over slowing economic growth, despite persistently high price pressures.
Meanwhile, the euro is holding steady, supported by mid-tier data aligning with the European Central Bank’s (ECB) dovish stance.
Key Technical Levels to Watch
Currently, EUR/GBP is approaching critical resistance zones:
- The R1 Pivot Point at 0.8352.
- The upper boundary of a descending channel established since mid-September.
- The 200 SMA on the 4-hour chart, a key level attracting both bulls and bears since November.
A sustained break above 0.8300, confirmed by bullish candlestick patterns, could signal a move toward the R1 Pivot Point or a retest of the channel’s resistance.
On the flip side, a rejection near 0.8300, accompanied by bearish candlesticks, may prompt selling pressure, pulling EUR/GBP back toward the December support level at 0.8225.
Fundamentals and Strategy
As always, directional biases in the market are driven by fundamentals. Stay updated on economic calendars and news affecting both the euro and the pound to assess volatility and sentiment shifts.
Regardless of which scenario unfolds, keep an eye on major catalysts and ensure disciplined risk management with proper position sizing in your trades.
