EUR/GBP Price Forecast: Rising in a shallow recovery channel
- EUR/GBP is rising in a shallow channel since it bottomed out in late August.
- The trend is now probably sideways – possibly even bullish, with odds favoring more upside and a reversal.
EUR/GBP continues steadily recovering in a shallow channel. The dominant short-term downtrend in August has ended and the pair has entered a sideways trend. It is even possible it could be at the start of an uptrend.
EUR/GBP 4-hour Chart
EUR/GBP will probably continue its shallow rising channel higher. An acceleration to the upside and decisive breakout above the upper channel line could lead to a move up to a target at 0.8468. The odds are probably now marginally in favor of more upside. A decisive break would be one accompanied by a long green candle that breaks above the level and closes near its high, or three green candles in a row.
The Relative Strength Index (RSI) momentum indicator is rising in line with price, indicating mild bullish confidence.
It is still possible the August downtrend could resume, with a decisive breakdown below the lower channel line probably leading to a fall to a target at 0.8400.
The pair was falling in a descending channel during August. The downtrend accelerated and temporarily broke out of the bottom of the channel – a sign of exhaustion. After bottoming out it began a shallow recovery which continues evolving.
Author
Joaquin Monfort
FXStreet
Joaquin Monfort is a financial writer and analyst with over 10 years experience writing about financial markets and alt data. He holds a degree in Anthropology from London University and a Diploma in Technical analysis.
