EUR/GBP appears to be struggling to move past its latest highs, forming a potential double top on its 4-hour chart.

Can it break below the neckline to signal a reversal?

Or will it make another attempt to break higher and sustain the uptrend?

EUR/GBP 4-hour Forex Chart by TradingView

Thanks to the Bank of England’s surprise “hawkish cut” last week, pound bulls found another reason to charge and keep EUR/GBP below the .8750 minor psychological resistance.

The lack of progress in EU-US trade talks also appears to be weighing on the shared currency, dragging the pair close to the neckline support near S1 (.8630).

Is EUR/GBP due for a downtrend soon?

Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the British pound and the euro, then it’s time to check out the economic calendar and stay updated on daily fundamental news!

The 100 SMA is above the 200 SMA for now, suggesting that the path of least resistance is to the upside or that there’s still a chance the bullish trend could pick up. If so, EUR/GBP could set its sights back on the resistance at the pivot point level (.8690) then the tops near R1 (.8720) or higher.

On the other hand, a clean break of support could set off a drop that’s the same height as the chart formation, possibly bringing the pair below S2 (.8590) then down for a test of S3 (.8540) then S4 (.8480).

Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.

Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.