4 min readEUR/GBP has recently broken above a descending trendline that had been active since February 2023, potentially signalling a macro shift in the pair’s high time frame structure. A key indication of this shift is the fact that price is now trading above the 200-day simple moving average, which itself has begun sloping upwards, adding further bullish bias.
On the downside, the area between 0.8440 and 0.8470 is emerging as a potential zone of interest. This area includes the 0.702 Fibonacci retracement level at 0.8440 and the daily 50 EMA at 0.8470. The fact that the 50 EMA aligns with the 0.618 Fibonacci retracement level adds further confluence. A retest of this zone could potentially attract buyers, especially if broader market sentiment remains supportive.
To the upside, the next major level to reclaim is the 50% Fibonacci retracement level of the broader downtrend, which sits around 0.8520. This level is also confluent with a long-term high time frame support and resistance zone. While it is currently acting as resistance, a sustained break and reclaim above this level would confirm it as new support and further reinforce the bullish case.
As we approach key data releases this week, including the EU balance of trade and UK inflation data on 8 May, traders should remain attentive to potential volatility. These events could provide the catalyst for either validating the recent bullish break or testing the resilience of the newly established support levels.
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