EURGBP still harassing the 0.858 support
06 December 2022
In December, a very important battle is fought on the EURGBP who is currently hovering above the key long-term horizontal support around 0.858 (blue). The result of this battle will determine the direction of this instrument in the upcoming weeks and months. Buyers may remain positive for now, but it is impossible to predict how long for!
0.858 has been supporting buyers since August. Since then, it was tested a few times but always ended up defended and the contacts with that area resulted in upswings. Most recently, at the very beginning of December, the price entered this area deeper than before, rising concerns about a possible breakout.
This morning, the buyers unleashed a counterattack that almost broke the mid-term down trendline, connecting lower tops since the middle of November. They were unable to hold the gains, which pushed the price back lower. As you can see, it is really hard to clearly pinpoint a winner here.
How to trade the current situation? In my opinion, the best thing to do is wait for the breakout. A price closing a day below the blue area would mean a strong signal to sell and a price closing a day close to the weekly highs would be a signal to buy. As for now, the first scenario seems slightly more probable as the bearish pressure is still here and the sellers are not giving up.