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Since breaking channel support on September 12, the EURGBP has gone nowhere fast. The pair has been limited to a 270 pip range between 0.8745 support and 0.9015 resistance since late September.
There was even a bearish pin bar that formed on November 15 after tagging the 0.9015 area for the third time. This range has offered traders the ability to go long from support and short retests of resistance.
However, the bigger play here would be a break from this range in my opinion. Due to the sizable distance between the range top and bottom, a breakout could carry the Euro cross 270 pips in either direction.
A daily close at 5 pm EST above resistance at 0.9015 would target the current 2017 high near 0.9280. Alternatively, a daily close below support at 0.8745 would pave the way for a move toward the 0.8470 area.
It just so happens that 0.8470 is a level I’ve had on my chart for quite some time. It may not look like much at first glance, but a view from the weekly time frame shows its influence all the way back to 2010.
Right now this is a waiting game to see whether it’s buyers or sellers that regain control. If I had to guess, I would say that a break lower is the likely path forward given the impulsive look of the recent decline that started in late August.
As always, the market will have the final say. You could trade the current range until the pair breaks out, but prepare yourself for choppy price action if you do.