- EUR/GBP made a bullish breakout at the SMA 30 but came down again.
- The pair trades below the SMA 30 by confirming the breakout with a spinning top.
- The H1 chart looks bearish upon finding its resistance around the swing high.
- Intraday minor charts have been bearish.
EUR/GBP – Technical Analysis- H4 Chart
The chart shows that after being bearish for a long time, it consolidated at 0.85165 and produced a bullish engulfing candle. The next candle breached the simple moving average 30 and traded above it for a while. However, the price breached the SMA 30 again. As of writing, the pair traded below the SMA 30. Since the price reacted heavily at 0.85165 earlier, trader may not go short based on this chart. They may wait for a bearish breakout at the level to drive the price towards the South.
However, the buyers may wait for the chart to produce a bullish reversal pattern at the swing low followed by a breakout at the SMA 30 to go long in the pair. If that happens, the pair may remain bullish for some days.
Price Action Analysis- H1 Chart
The chart shows that the price consolidated and made a strong bearish move. It bounced at 0.85330 and made a bullish correction. However, upon producing a bearish engulfing candle, it has been heading towards the South. The swing low level suggests that it has enough space to travel towards the downside. Thus, the sellers may go short and drive the price towards 0.85165.
It does not look good for the buyers unless it produces a strong bullish reversal pattern. They may wait for the price to find a support, which could be the swing low level.
Considering both charts, it seems that the pair may extend its bearish move. Nevertheless, the level of 0.85165 may hold the price as a support. Thus, traders are going to keep their eyes to see how the price reacts at that level.
Written by: Md Tareq Sikder, Senior Analyst Forex Prop News
Contact and follow Tareq on Twitter: @tareqfpn