This and the previous week are extremely important for market participants monitoring the dynamics of EUR/GBP due to the meetings of the European Central Bank (last Thursday) and the Bank of England (this Thursday).
The breakout of significant support levels last month at 0.8720 (144 EMA on the daily chart) and 0.8705 (200 EMA on the daily chart) led to the movement of EUR/GBP into the medium-term bearish market zone, and the breakout of the key support level at 0.8655 (200 EMA on the weekly chart)—into the long-term bearish market zone.
Currently, EUR/GBP is testing the lower boundaries of the downward channels on the daily and weekly charts, passing through the 0.8530 level, declining further towards the key support levels at 0.8400 (144 EMA on the monthly chart) and 0.8210 (200 EMA on the monthly chart), which separate the pair's global bullish trend from the bearish one.
A break of today's low at 0.8518 could signal an increase in short positions with targets at support levels of 0.8485 and 0.8400.
In an alternative scenario, after breaking the local resistance level at 0.8610, EUR/GBP may resume its rise towards the key resistance level at 0.8655, a breakout of which could trigger further growth, and a breakout of the key resistance levels at 0.8705 and 0.8720 would once again bring EUR/GBP into the zone of medium-term and long-term bullish markets, making long positions preferable.
The first signal for the development of this scenario could be a breakout of the important short-term resistance level at 0.8566 (200 EMA on the 1-hour chart).
Support levels: 0.8518, 0.8500, 0.8485, 0.8400, 0.8300, 0.8210, 0.8200
Resistance levels: 0.8540, 0.8566, 0.8590, 0.8610, 0.8645, 0.8655, 0.8670, 0.8705, 0.8720, 0.8825, 0.8870