The EURGBP pair looks to have topped around the 0.8600 price level and has sold off aggressively from potential being “overvalued” in recent days. Bearish EU news is hitting the euro currency hard.
Additionally, the concerns about gas supplies for the winter have investors moving out of Europe, which is causing significant pressure on the EURUSD, which tends to harm the EURGBP pair if sterling is holding firm.
The EU recently passed a watered-down conservation plan that called for EU countries to cut gas use by 15% from August through to March next year. This plan has not impressed market participants.
It should also be noted that reports are surfacing that incumbent British PM Boris Johnson may not step down after all. This has clearly given the British pound a boost on the FX market.
With this in mind we have to examine how cross-currency pairs actually work. Weakness pitted against strength in currencies is the ultimate play. When one currency is heading lower and the other higher it really is a currency traders intraday dream.
According to the technicals a run towards the 0.8200 support level could be on the cards for the EURGBP pairs starts to ignite a large head and shoulders pattern on the lower time frames.
The ActivTrader platform shows that bullish sentiment is rising, with some 73 percent of traders now expecting more upside in the EURGBP pair despite the recent price collapse.
Overall, this should be very bearish for the EURGBP pair because a big sentiment shift has happened. Last week 58 percent of traders were bullish.
EURGBP Short-term Technical Analysis
The four-hour time frame shows that the EURGBP pair is technically bearish over the short-term with the price trading slightly below its key 200-period moving average, around the 0.8550 area.
A head and shoulders pattern has recently formed and is projecting a move towards the 0.8200 level if weakness persists below the 0.8400 technical region.
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The ActivTrader platform shows that bullish sentiment is rising, with some 73 percent of traders now expecting more upside in the EURGBP pair despite the recent price collapse.
Overall, this should be very bearish for the EURGBP pair because a big sentiment shift has happened. Last week 58 percent of traders were bullish.
EURGBP Short-term Technical Analysis
The four-hour time frame shows that the EURGBP pair is technically bearish over the short-term with the price trading slightly below its key 200-period moving average, around the 0.8550 area.
A head and shoulders pattern has recently formed and is projecting a move towards the 0.8200 level if weakness persists below the 0.8400 technical region.
See real-time quotes provided by our partner.
