On October 4, I wrote about a potential breakout on EURGBP.
You can see how the pair recently broke above descending channel resistance that extends from the August high.
I discussed EURGBP again in Saturday’s forecast video, noting how a close above 0.8920 would expose the next key resistance at 0.9015.
That brings us to today’s price action.
The EURGBP is well on its way to retesting the 0.9015 resistance level.
You can see how 0.9015 served as support in late August before flipping to resistance in early September.
As for key support, the 0.8920 is now a must-hold level for EURGBP bulls.
This is the area the pair broke out from earlier this week, and also the one I mentioned in Saturday’s video.
If EURGBP can get through 0.9015 resistance, I would keep a very close eye on the next resistance area at 0.9090.
This is one I discussed at length when the pair topped out earlier this year.
Take a look at the weekly time frame, especially the price action between August 2018 and January 2019 to see why 0.9090 is so important.
I think that the 0.9090 area will be the determining factor as to whether this latest selloff was a mere correction or is the start of an impulsive move lower.
In other words, if EURGBP can eventually manage a daily close above 0.9015 and 0.9090, I think there’s a good chance we’ll see another run at the year-to-date high.
However, if we see an aggressive selloff materialize from 0.9015 and especially 0.9090, we could see EURGBP retest year-to-date lows.
At least that’s how I’m approaching the pair for now.
But so far, buyers are in control while above 0.8920 with a focus on 0.9015 and perhaps 0.9090.
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