EUR/GBP Seems to Have Turned Bullish on H4 Chart
EUR/GBP has turned bullish for a few weeks now and pullbacks lower should be seen as good opportunities to buy this pair
EUR/GBP has been on a bearish trend since early August, after the European manufacturing fell deeper into recession, where it has remained since then. The ECB has turned dovish again, cutting deposit rates to -0.50% and introducing a 20 billion Euro bond purchasing programme again, which has kept the Euro down.
The GBP, on the other hand, has been bullish during the last few months, as UK Conservatives headed towards the general elections, winning a clear majority in the British parliament. But, the optimism faded quickly after the elections, since the UK is still headed out of the EU and it will be difficult for them to reach a trade deal, which means a hard Brexit if they don’t.
So, EUR/GBP has turned bullish as the GBP turns bearish. EUR/GBP reversed below 0.83 and has climbed more than 300 pips since then. The price has broken above all moving averages on the H4 chart now, so buyers are in total control. These MAs used to provide resistance when this pair was on the way down, now they should turn into support.
The 200 SMA (purple) turned into support last week and the price is heading down there again now. I will look to buy this pair down there, so I’ll be following the price action closely, hoping for a bullish reversing signal above the 200 SMA, such as doji/pin candlestick.
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