EUR/GBP Flirting With the 0.83 Again

The past few weeks have been very interesting on this instrument, which has been flirting with a major, long-term horizontal support on the 0.83.

EUR/GBP Technical Analysis

Ok, so the story here is that this support (orange), has been absolutely crucial since 2016. For years it was protecting the buyers from a bearish trend. At the beginning of March, for the first time since 2016, the price dropped below that support.

In theory, that gave us a proper, long-term sell signal. Just in theory, as the price reversed quite quickly, and instead of a bearish trend, we received the false bearish breakout (blue). Usually, false breakout are amazing signals to trade in the opposite direction. Will that be the case here as well? We’re about to find out.

Trading Strategy

The reason I mention this now is that we’re back on 0.83 again. This time, we’re testing it from the top, as a support. The price creating a firm bounce would be a nice buy signal. On the other hand, the price breaking the orange line and closing a day below the 0.83 would be a signal to sell. As for now, the first option seems slightly more probable.

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