EUR/GBP reached new one-year highs at 0.8477 on February 7. Since then, it has been reversing and forming a downtrend channel. It is currently consolidating around the zone 4/8 Murray (0.8422), showing some uncertainty ahead of US inflation data to be released in the coming hours.
The eagle indicator touched the level of 95-point twice, representing an extremely overbought market. A technical correction towards the 200 EMA around 0.8391 could occur in the next few hours.
The divergence of monetary policies between the BoE and the ECB helped EUR/GBP to strengthen since the beginning of February. The chart above shows that the Euro has gained ground and the British pound is shaken due to political jitters in the UK.
Technically, the EUR/GBP pair is expected to make a correction towards the 200 EMA before it resumes its main uptrend.
A trade above the 21 SMA located at 0.8436 and a break and consolidation above 0.8453 could mean a resumption of the uptrend towards 6/8 Murray at 0.8483 and up to the psychological level of 0.8500.
Our trading plan is to sell the cross EUR/GBP as long as it remains below the 21 SMA and below the top e downtrend channel, with targets towards the 200 EMA around 0.8391. The Eagle indicator supports our bearish strategy.
Support and Resistance Levels for February 10 - 11, 2022
Resistance (3) 0.8470
Resistance (2) 0.8453
Resistance (1) 0,8432
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Support (1) 0.8404
Support (2) 0.8392
Support (3) 0.8361
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Scenario
Timeframe H4
Recommendation: sell below
Entry Point 0.8436
Take Profit 0.8391
Stop Loss 0.8472
Murray Levels 0.8453 (5/8), 0.8422,(4/8), 0.8392 (3/8), 0.8361 (2/8)
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