EUR/GBP Approaches Key Support After Sharp Decline
23 May 2024
After several days of continuous decline, we turn our attention to the EUR/GBP pair, which has faced significant downward pressure. The price has now reached a crucial horizontal support level marked in blue, which could potentially signal the start of a new bullish trend. This support was established in July 2023 and has acted as a strong reversal point in August last year and again in February and March of this year.
Historically, every interaction with this support has resulted in a rapid V-shaped reversal, indicating strong buying interest at these levels. For a new buy signal to emerge, we need to see a similar V-shaped reversal. If the price stays around this support without bouncing, it suggests continued selling pressure. A price close below the blue area today would confirm a sell signal, while a rapid bullish reversal pattern like a shooting star or bullish engulfing candle would signal a buy.
Traders should monitor the EUR/GBP closely for these critical signals, as the outcome will determine the next major move for this pair. Whether it will bounce back or break through this key support will be pivotal.