FX.co ★ dare.jammie | EUR/GBP

EUR/GBP Timeframe H4

Based on the EUR/GBP H4 chart, the current price action shows a correction phase after previously experiencing a fairly strong rise. The price structure from mid-July to early September still shows a bullish tendency, marked by a series of higher lows and higher highs. However, entering mid-September, the price faced significant selling pressure and fell back to an important support area. This condition puts EUR/GBP at a rather interesting point because the market is testing whether the previous uptrend can still be maintained or is starting to turn bearish. On the chart two main moving averages are visible, namely the MA 100 in blue and the MA 200 in red. In general, the position of these two MAs suggests that the medium-term trend structure is still relatively positive. The MA 100 has been moving up and for several periods has been above the MA 200. This indicates that price momentum in the medium term is still stronger compared to its long-term average. In addition, the MA 200, which had tended to be flat, is beginning to show an upward tilt. That combination is an indication that the bullish trend has not completely lost its foundation. Nevertheless, the price position relative to the two moving averages needs to be observed more seriously. After reaching the area around 0,8600–0,8605, the price experienced a rejection and then moved down quite sharply. That decline caused the price to break the MA 100 from above to below. This is a signal that medium-term bullish momentum is weakening. Currently the price appears to be around 0,8560, while the MA 100 is slightly above the price and the MA 200 is also in the area around the 0,8570s. Thus, the two MAs now have the potential to change role into dynamic resistance. If the price fails to convincingly break back above the MA 100 and MA 200, bearish pressure could continue. Conversely, if the price manages to get back above both moving averages and produces a strong H4 candle, the recent decline can be considered a correction within the uptrend rather than a permanent trend change. From the perspective of horizontal support and resistance, the chart shows several important levels worth noting. The nearest resistance is around 0,8569–0,8570. This area is interesting because it is close to the MA 200 and had previously been an area of price activity. As long as EUR/GBP remains below that region, sellers have the short-term technical advantage. If a rebound toward 0,8569–0,8570 occurs and the price then gets rejected again, the likelihood of a lower high forming will increase and can serve as additional confirmation for the bearish scenario. The next resistance is around 0,8585–0,8586. This level is a fairly clear horizontal area on the chart and previously acted as the upper boundary of price movement. A breakout of that resistance would be positive for buyers because it would show that price has reclaimed an area that had been supply. If the 0,8585–0,8586 level is breached with a solid H4 candle and then confirmed by a retest, the chances for the price to re-test the 0,8600–0,8605 area will increase. The 0,8600–0,8605 area itself is the main resistance. In early September the price moved up toward that region and even spiked to a higher area before eventually consolidating and reversing. This means there is quite strong supply around that area. If the price returns to that region, sellers are likely to respond again. A valid break of 0,8605 would be a much stronger bullish signal and open the way toward the next psychological resistance around 0,8610–0,8612. On the downside, 0,8553–0,8554 is the nearest support and is currently a very important level. The price appears to have rebounded after reaching that area. The buyers’ reaction in this area shows that there is still demand able to hold the decline. As long as that support holds, the possibility of a technical rebound remains open. However, if an H4 candle can close decisively below 0,8553, the short-term structure will become more bearish. If 0,8553 is broken, attention can shift to the 0,8532–0,8533 area. This level is a horizontal support that is quite clear from previous price structure. That area was once a consolidation point and several times served as a place where price paused or reversed. Therefore, if EUR/GBP breaks 0,8553, the 0,8532–0,8533 area could become the next correction target. Lower supports are around 0,8505, then 0,8483, while the next extreme area is around 0,8459–0,8460. Those levels are more relevant if selling pressure develops into a larger trend change. As long as the price has not broken those supports, declines can still be categorized as a correction to the uptrend formed since July. Looking at the overall chart structure, there is an interesting divergence between the medium-term trend and short-term momentum. The medium-term trend still has a bullish character because the MA 100 is above the MA 200 and both had previously been rising. However, short-term momentum has turned bearish after the price dropped from the 0,8600 area and broke the MA 100. Therefore, the current condition is better described as a bullish trend undergoing a bearish correction, with the risk of a trend change if key supports fail to hold. In the bullish scenario, the price needs to hold the 0,8553–0,8554 area and then form a higher low on the H4 timeframe. After that, stronger confirmation would appear if the price manages to break back above 0,8569–0,8570. A breakout of the MA 100 and MA 200 would reduce bearish pressure and open space toward 0,8585–0,8586. If that resistance is overcome, the next target is 0,8600–0,8605. In other words, buyers need a series of confirmations, not just a single bullish candle, to restore the up structure. Meanwhile, the bearish scenario will become stronger if the price fails to hold 0,8553. An H4 close below that support would indicate that demand is starting to lose control. In that case, the 0,8532–0,8533 area becomes the next correction target. If that support is also breached, the potential decline could develop toward 0,8505. The bearish scenario becomes increasingly valid if the MA 100 continues to fall and eventually moves toward or breaks through the MA 200 from above to below. Kesimpulan: overall, EUR/GBP H4 is currently in a neutral-to-bearish condition for the short term, but the medium-term trend structure has not fully turned bearish. The MA 100 and MA 200 form an important dynamic resistance area around 0,8570, while the 0,8553–0,8554 support is the key level that will determine the next direction. As long as that support holds, the chances of a rebound toward 0,8569–0,8570 and then 0,8585–0,8586 remain open. Conversely, a valid break below 0,8553 will increase the probability of a decline toward 0,8532–0,8533 and potentially continue to 0,8505. Therefore, the 0,8553 support and the 0,8570 dynamic resistance are the two most important areas to watch before determining the next directional bias.