The EUR/GBP currency pair is currently trading in the 0.8560s, within a well-established multi-month range.
Sideways Trend Prevails
- The pair has been oscillating within this range for a significant period, suggesting indecision in the market.
- “The trend is your friend” adage advises staying with the dominant trend, which in this case is sideways.
Support and Resistance Levels
- EUR/GBP recently approached the range ceiling but reversed course.
- Support lies at the cluster of 50, 100, and 200-day SMAs (Simple Moving Averages) around 0.8565.
- A break below this support could lead to a decline towards 0.8530.
Technical Indicators Offer Mixed Signals
- The MACD indicator, although briefly bullish, is now turning lower.
- A confirmed break below the signal line could indicate further downside for EUR/GBP, especially given the sideways trend where MACD is more reliable.
Looking for a Trend Change
- A decisive breakout above or below the range boundaries is needed for a confirmed trend shift.
- A break below the range floor could open the door for a drop to 0.8486 or even 0.8460.
- Conversely, a breakout above the range ceiling could see EUR/GBP rise to 0.8635 or potentially reach 0.8645.
Confirmation of Breakouts
- A decisive breakout requires a clear candlestick pattern, such as a long candle closing near its high/low after breaching the range, or three consecutive candles moving in the breakout direction.
