If we look at the chart of Europe’s two most important currencies – the euro and the British pound – we can see that the quotations since March 2020 have formed a right-angled triangle formation, the support of which has repeatedly served as resistance, and after overcoming it in May last year became a support.
- Is this the end of consolidation on EURGBP?
- Magic support at 0.8862
This is the sixth attempt to break this level. It is not often that the market marks a decisive level in such a clear way, so it is worth following the price behaviour in this area to join the market at the right moment.
The level of 0.8862 has already been “attacked” by sellers six times, each time the demand did not allow to overcome it.
Today’s declines on EURUSD and slight increases on cable caused that the price is again quite dynamically moving towards this strong support.
In my analysis from Monday I pointed to the high probability of an upward correction on the dollar index (DXY), which may cause declines on the EURUSD pair. If this scenario comes true the EURGBP pair will overcome the 0.8862 support and the declines may gain momentum. A good level for supply will be the demand zone starting at 0.8720.
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