EURGBP : INVERTED HEAD AND SHOULDERS ?
- The market is trading below a bearish trendline since beginning of May 2024 ; the mid-term trend is bearish for EURGBP.
- Since the impact over 0.8397, the market has registered an increased buying pressure, preventing prices from dipping further.
This slow trading mind shift has led the market into what looks like a potential inverted Head & Shoulders bullish reversal pattern.
Moving averages are reversing to the upside, even if a bullish cross remains yet to be seen.
The MACD indicator has already shown a bullish break-out of its own bearish trendline.
- This is seen as a potential bullish reversal situation. Indeed, the rounding bottom/H&S usually displays a fading interest from short sellers, leading to the end of a bearish trend.
In addition, this scenario is also supported by the fact more and more traders now await for dovish moves to come from the BoE, especially after they have been disappointed following the last monetary decision.
BoE Governor recently said cutting rates prior to the coming general elections in the UK wasn't a right timing, which opens the doors to a start of the next monetary easing cycle for the coming monetary meetings.
This scenario would significantly decrease appetite for the Pound Sterling, leading EURGP to a new mid to long-term bullish trend.
Pierre Veyret, Technical Analyst at ActivTrades.
The information provided does not constitute investment research. The material has no been prepared in accordance with the legal requirements designed to promote the independence of investment research and such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
- Since the impact over 0.8397, the market has registered an increased buying pressure, preventing prices from dipping further.
This slow trading mind shift has led the market into what looks like a potential inverted Head & Shoulders bullish reversal pattern.
Moving averages are reversing to the upside, even if a bullish cross remains yet to be seen.
The MACD indicator has already shown a bullish break-out of its own bearish trendline.
- This is seen as a potential bullish reversal situation. Indeed, the rounding bottom/H&S usually displays a fading interest from short sellers, leading to the end of a bearish trend.
In addition, this scenario is also supported by the fact more and more traders now await for dovish moves to come from the BoE, especially after they have been disappointed following the last monetary decision.
BoE Governor recently said cutting rates prior to the coming general elections in the UK wasn't a right timing, which opens the doors to a start of the next monetary easing cycle for the coming monetary meetings.
This scenario would significantly decrease appetite for the Pound Sterling, leading EURGP to a new mid to long-term bullish trend.
Pierre Veyret, Technical Analyst at ActivTrades.
The information provided does not constitute investment research. The material has no been prepared in accordance with the legal requirements designed to promote the independence of investment research and such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
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