Potential Signal:
If the EUR/GBP pair were to close above the 0.85 level, a stop loss at 0.8450 with a target of 0.86 could be considered. There may be an opportunity to let the market run higher towards 0.8650, depending on momentum.
The euro showed signs of recovery against the British pound on Monday, despite recent strength in the pound and rate cuts by the European Central Bank. A snap election in France also caused some turbulence in the euro, but the market seems to be stabilizing.
Value hunters are pushing the market higher as the European Union remains intact. The 0.85 level is a key area to watch for potential resistance.
Technical Analysis:
Although technical analysis appears negative, the current price level has historically been a strong support area. Traders who focus on longer-term charts are getting involved, especially if the market can break above the 0.85 level where the 50-Day EMA is located.
Breaking above 0.85 could lead to a bullish move towards 0.86, supported by recent bounce off the 0.84 level. This level has been a significant support zone over the years.
It will require strong momentum for the market to reach 0.86, but current indications suggest a push in that direction. Traders may want to consider taking advantage of the potential upside.
Trade our free daily signal with one of the best forex brokers available.