Major Turnaround on EUR/GBP: Key Support Reclaimed
13 December 2024
The EUR/GBP pair has experienced a remarkable turnaround this week after starting with a significant sell-off. On Tuesday, the price broke below a key horizontal support level marked in yellow, signaling initial weakness. The decline deepened on Wednesday, reinforcing bearish sentiment. However, on Thursday, the market staged a major reversal, signaling renewed strength in the pair.
Today, this reversal gained confirmation as the price climbed back above the previously broken yellow support level, which now acts as a resistance-turned-support. The move was catalyzed by weaker-than-expected GDP data from the UK, further boosting the euro's recovery.
This three-day sequence of a drop followed by a recovery can now be classified as a false breakout, with the price's return above the yellow support providing a buy signal for EUR/GBP. As long as the pair remains above this level, the sentiment will likely stay bullish, paving the way for potential further upside.
However, traders should remain cautious about any return below the yellow support, as that would negate the current bullish momentum and reintroduce bearish pressure.