EUR/GBP Analysis: Bearish Sentiment Looms as Price Breaks Key Uptrend Line and Tests Crucial Support
08 May 2023
Last week was pretty bad for EUR/GBP, and the situation could potentially worsen. We may soon get an answer and a trigger for a bigger move on this pair. Let's take a closer look at the current situation.
Last week, the price broke an important uptrend line, which had been connecting higher lows since the beginning of August. This line can be considered an uptrend line or a lower line of a symmetric triangle (with an upper red line). The breakout that occurred on Thursday can be seen as an invitation to go short.
Currently, sellers are fighting for confirmation, and the price is resting on a key horizontal support level at 0.872 (green). As long as the price stays above this level, there cannot be a full-fledged signal to sell. This support level is a crucial stronghold, but buyers are struggling to create any bounce in the middle of the European session. Bearish pressure is high, and a breakout seems likely to occur sooner or later.
If EUR/GBP closes a day below the green area and near the daily lows, it would confirm the bearish sentiment we mentioned earlier. In my opinion, this scenario is currently more likely to happen, so my view on this pair is definitely bearish