Bearish double-top warning: EUR/GBP technical analysis
EUR/GBP technical analysis indicates that a huge directional breakout will take place once the 0.9000 to 0.9387 price range is breached. Overall, the short and medium-term trend still remains bullish.
The euro currency is starting to come under pressure against the British pound, as bulls fail to sustain the strong bullish momentum seen in the pair earlier this month.
EUR/GBP technical analysis shows that a bearish double-top pattern has formed, placing short-term selling pressure on the pair.
EUR/GBP medium-term price trend
The EUR/GBP pair is coming under downside pressure this week as the British pound stages a comeback after last week’s drubbing against a basket of currencies.
The euro currency has also suffered from broad-based weakness on the foreign exchange market this week, while other currencies have started to recover against the greenback.
EUR/GBP analysis shows that the pair still has a strong medium-term bullish bias while the price trades above the 0.8760 level.
The daily time frame shows that a bounce has occured from just below the 0.9000 level, with buyers needing to anchor the price above the 0.9320 technical area to trigger a large inverted head-and-shoulders pattern.
Overall, if bulls can stabilise price above the 0.9320 level the EUR/GBP pair could stage a powerful rally towards parity. Losses under the 0.9000 level could force a technical test of the 0.8760 level.
EUR/GBP short-term price trend
EUR/GBP technical analysis shows that the pair has a strong bullish bias over the short term while the price trades above the 0.8670 level.
The four-hour time frame shows that a bearish double-top pattern has recently formed, following the recent rejection from the 0.9387 level.
Looking more closely at the four-hour time frame, a rising trendline is also offering critical support on the lower time frames, around the 0.9050 level.
Dip-buying has occurred from the 0.9000 level so far, bulls may look to enter into the prevailing up trend from the 0.9050 level if another push lower occurs.
In the near term, the 0.9050 to 0.9200 price range remains key.
EUR/GBP technical summary
EUR/GBP analysis shows that a bearish double-top pattern is weighing on the pair in the short term. Bulls need to anchor the pair above the 0.9387 level to encourage medium-term buying.