FX.co ★ EUR/GBP

The EUR/GBP currency pair is currently trading around 0.8573 during Wednesday's session, indicating a cautiously defensive tone amid failed attempts to extend the recent bullish move. Indeed, the most recent attempt to advance has again encountered resistance around the key levels of 0.8580-0.8585, which correspond to the top of the ascending triangle pattern. Given the lack of significant macroeconomic events in the Eurozone and the UK, market sentiment becomes another important factor behind the currency pair's performance. Higher global interest rates and growing risks of the new Iranian crisis have led to risk aversion, while a strengthening US Dollar has put downward pressure on both European currencies. Comments from ECB Council member Joachim Nagel have confirmed high expectations for the September interest rate increase, but have not helped the EUR overcome the mentioned level. In terms of technical analysis, the balance of momentum is maintained, with no directionally biased trend. The four-hour Relative Strength Index is fluctuating in neutral territory near 50, indicating no clear edge for buyers or sellers. The Moving Average Convergence Divergence is flat near the zero line as well. These signs suggest that a breakout is likely, creating a trend in the EUR/GBP pair. Now, the price is stuck inside the triangle pattern, making the upper and lower borders more significant. However, the formation remains bullish and valid until a breakdown below 0.8585, which is the low from July 30. A breakout above this level will confirm a bullish trend and may lead to the test of the lows from late June, above 0.8600. If the bullish trend gains momentum after this level, the triangle's target will be set at 0.8630. Conversely, the first level of support appears around 0.8560, where the bottom border of the triangle converges with Tuesday's lows. Breaking below this price level could negate any near-term bullish sentiment and turn market focus to the August 25 lows of 0.8546. Maintaining a position above 0.8560 could keep the triangle pattern intact and give buyers another chance to test 0.8585.