FX.co ★ dare.jammie | EUR/GBP

EUR/GBP H4 Timeframe

Based on the EUR/GBP chart on the H4 timeframe, conditions still show a strong dominance of the bearish trend. Since mid-June, this pair has continued to form a series of lower highs and lower lows, which is a key characteristic of a healthy downtrend. Although there was a rebound after price touched the low around 0.8455, that rise has not been able to change the overall market structure. Currently, price is moving around 0.8492 and is still below an important resistance area, so the probability of continued weakness remains greater than the potential for a bullish reversal. From the Moving Average perspective, the positions of the 100 MA and 200 MA clearly confirm the dominance of the bearish trend. The 100 MA is below the 200 MA and both have a downward slope. This condition indicates that selling pressure is still controlling price movement in the medium term. In addition, price is currently still trading below both the 100 MA and 200 MA, which means these indicators are acting as dynamic resistance. Every time price attempts a recovery, the area around the 100 MA becomes the first barrier that triggers renewed selling pressure. As long as price is unable to break and hold above the 100 MA, let alone the 200 MA, the bearish bias remains the main scenario. Looking at the candlestick pattern, the decline that has occurred since late June has unfolded gradually but consistently. Sellers continue to dominate the market by forming new lows. There was indeed a sharp bounce after price touched the 0.8455 area, but that rally looks more like a technical correction than the start of a trend reversal. This is evident from price’s inability to break the nearest resistance and its subsequent weakening after approaching that area. The movement of the last few candlesticks also shows a narrow consolidation, indicating that the market is waiting for a new catalyst to determine the next direction. From the horizontal support and resistance side, the first resistance is at 0.8543. This area is the nearest barrier and is also close to the position of the 100 MA, so it plays an important role in determining whether the recovery can continue. If price manages to break this resistance with a convincing candlestick close, the upside potential towards the next resistance around 0.8617 will open up further. However, the 0.8617 area is also close to the 200 MA, so it is expected to be a much stronger resistance. The next resistance is at 0.8650, while the major resistance is at 0.8688, which is an important peak in the previous price structure. As long as price is still moving below all of these resistance areas, the chances of a trend change remain relatively limited. On the other hand, the nearest support is at 0.8482. This area is currently being tested by price and is the short-term directional pivot. If selling pressure increases again and breaks this level, the downside potential towards the next support at 0.8455 will grow larger. The 0.8455 support is a very important level because it previously acted as the low that triggered the rebound. If this area is broken again, the bearish structure will strengthen further and open the door for a new lower low, which could extend the downtrend over the next several trading sessions. The relationship between the 100 MA and 200 MA also shows that bearish momentum is still quite solid. The distance between the two moving averages is still fairly wide and has not yet shown signs of narrowing, which usually precedes a trend change. The downward slope of the 200 MA indicates that the medium-term downtrend has not lost its strength. Therefore, any price rally towards the 100 MA or 200 MA areas can still potentially be used by market participants as an opportunity to reopen short positions, as long as there are no technical signals indicating a significant structural change. In the short term, market participants’ attention will focus on price reaction around the 0.8482 support. If this level holds, EUR/GBP still has the opportunity for a limited rebound towards the 0.8543 resistance. However, if that support is broken, selling pressure is expected to dominate again with a downside target towards 0.8455. Conversely, for sentiment to turn more positive, price needs to break the 0.8543 resistance first, then continue strengthening above 0.8617 so it can escape the lower-high structure that has been dominating the chart. Overall, the technical analysis of EUR/GBP on the H4 timeframe still shows a bearish bias. The price position below the 100 MA and 200 MA, combined with the downward direction of both moving averages, confirms that the downtrend is not over. The still-intact lower-high and lower-low structure further reinforces the view that selling pressure remains the dominant factor in the market. As long as price is unable to break the 0.8543 resistance and especially the 0.8617 area near the 200 MA, recovery potential remains relatively limited. Conversely, if the 0.8482 and 0.8455 supports are broken again, the bearish trend is likely to continue with deeper downside targets, so in the near term market participants will stay focused on whether price can hold these support areas or continue weakening in line with the still-dominant trend.