EURGBP fights on a key long-term support

The second half of the European session brings a strong reversal on the Euro, which has its roots in the dovish words from ECB Lagarde. This reversal can have very strong technical implications, for example on our today’s hero – EURGBP, where the situation on the chart is extremely interesting.

EURGBP finished the last week on the key horizontal support on 0.858 (blue), which is protecting the buyers from the bigger reversal since August 2022. At the end of the Asian session, the price rose significantly, pulling the price above the short-term down trendline (green), connecting lower tops since the 14th of November. That could have been a strong buy signal but the reversal that we are witnessing now is currently questioning the bullish narrative.

What is threatening the buyers right now is the possibility of a false bullish breakout (orange). If the price will manage to close the day close to the daily lows, we will have a proper, mid-term sell signal, which will probably lead to another test of the 0.858 support. Rising pressure on this level may lead to a breakout which can have very dire consequences for the whole demand. Price closing a day below the 0.858 level would be an ultimate sell signal in the long term. As long as we stay above, buyers can still have hope.