The EUR to GBP exchange rate has made quite a move this Wednesday. After opening sharply lower, the pairing of the single currency to the Pound has witnessed a bullish rejection just above critical support as the relentless selling pressure on the Euro starts to fizzle out.
The EUR to GBP rate had plunged significantly in the last week after Germany saw a trade deficit for the first time in thirty years. Other downbeat data from the manufacturing and services PMI and lower-than-expected contraction in German industrial production also forced a steep selloff in the Euro.
The EUR to GBP pairing has fallen in the last five out of six trading sessions, with the 7 July 1.03% drop coming in close as the second-largest intraday drop in the EUR to GBP rate since the 10 May 2021 selloff. Slightly upbeat data from the UK GDP and the Industrial Production data helped the bears force initial gains, but these have been lost as the bulls force a recovery.
Technically speaking, the rejection from the recent support by the bulls follows the attainment of the measured move’s completion point following the rising wedge’s breakdown on 5 July 2022.
EUR to GBP Forecast
The evolving daily candle is that of a hammer that sits on the 0.84381 support (18/23 May and 12 July lows). If the daily candle ends the day above this support, it opens the door for a push toward the 0.84611 resistance. The bulls must degrade this barrier for a further push toward the 0.84883 and 0.85105 resistance levels, where the previous lows of 11 July 2022 and 31 March 2022 are located. Additional obstacles for EUR to GBP bulls are found at 0.85372 (16 May 2022 high) and 0.85961 (13 June high).
On the other hand, a closing penetration below the 0.84381 support brings 0.83932 support (17 May 2022 low) into the mix. Further price deterioration brings the potential for bear harvest points at 0.83073 (8 April low) and 0.82507 (14 April low). Finally, a potential pitstop exists at the 0.83500 psychological price level, where the 2 February and 24 March 2022 highs took up residence.