FX.co ★ EUR/GBP dynamics scenarios on August 17, 2023

Even a quick comparison, based on an analysis of inflation and business activity indicators in the UK and the Eurozone, suggests that the pound will continue to strengthen against the euro, i.e., the EUR/GBP pair will decrease. As of writing, the price was already able to update its intraday low and break through the 0.8538 mark, and the EUR/GBP pair dropped to a new low of 0.8534.

Earlier this month, EUR/GBP attempted to break through the key resistance levels of 0.8650 (200 EMA on the weekly chart), 0.8665 (200 EMA on the daily chart), which separate the medium-term and long-term bull markets from the bearish one.

In the event of a further decline, the target will be the 0.8400 mark, through which the lower boundary of the downward channel on the weekly chart passes, with intermediate targets at local support levels of 0.8520, 0.8500, 0.8485.

In an alternative scenario, EUR/GBP will eventually break through the resistance levels of 0.8650, 0.8665 and return to the long-term and medium-term bull markets.

The first signal for resuming long positions here could be a breakout of resistance levels 0.8550, 0.8564 (200 EMA on the 15-minute chart), and the confirming signal could be a breakout of the resistance zone around the levels of 0.8596 (200 EMA on the 1-hour chart), 0.8600 (200 EMA on the 4-hour chart), 0.8605 (50 EMA on the daily chart).

Support Levels: 0.8520, 0.8500, 0.8485, 0.8400

Resistance Levels: 0.8550, 0.8564, 0.8596, 0.8600, 0.8605, 0.8650, 0.8665, 0.8700, 0.8800, 0.8825, 0.8870