The EUR/GBP pair is moving back and forth between the support level at 0.8300 and the resistance level at 0.8450.
Is it preparing for a breakthrough soon?
Or are we about to see another bounce off these inflection points?
EUR/GBP 4 hours Chart by TradingView
The ECB’s dovish rhetoric appears to be weighing on the single currency this month, despite some improvement in mid-level data from the region’s major economies.
Moreover, the US election results also appear to add negative pressure to expectations of higher tariffs and potential trade conflicts with Europe during another Trump presidency.
These factors pulled the EUR/GBP pair to the bottom of its visible range on the 4-hour time frame ahead of the Bank of England (BOE) monetary policy decision.
Are we about to see a bounce or break from here?
Remember that directional biases and volatility conditions in market prices are usually driven by fundamentals. If you haven’t done your homework on the Euro and British Pound yet, it’s time to check the economic calendar and stay up to date with daily essential news!
A move below range support near S1 (.8310) could set the stage for a sell-off at the same height as the chart pattern, which extends around 150 pips. The 100 SMA is below the 200 SMA at the moment to indicate that support is more likely to break rather than hold, but the gap between the moving averages has narrowed to indicate a potential bullish crossover.
On the other hand, a bounce could take EUR/GBP back to the top of the range just below R1 (.8460) or at least up to the area of interest near the pivot point level (.8380). Keep your eyes open for reversal candlesticks around current levels to gauge whether the pair is likely to stay within its range.
It’s best to stay alert to any top-tier market events or headlines that could impact overall sentiment!