The EUR/GBP pair has been on a rollercoaster ride, with the short-term trend currently in doubt. After reaching a high on August 8, the pair has been on a downward trajectory, forming a falling channel and hitting new lows. However, the move downwards has been shallow, leaving the possibility for the prior uptrend to resume.
On the 4-hour chart, the pair’s decline has established a new sequence of declining peaks and troughs, potentially indicating a shift to a short-term downtrend. But the steep rally from July suggests that bullish conviction may still be strong, hinting at a correction rather than a new trend.
With conflicting signals, the direction of the short-term trend remains uncertain. A strong bullish reversal or an upside breakout from the falling channel could signal a continuation of the uptrend. On the other hand, a bearish scenario could see the pair falling further, potentially reaching the 0.618 Fibonacci retracement level at 0.8478.
It’s important to note that the long-term trend remains bearish on the weekly chart, adding to the technical confusion. In the midst of this uncertainty, traders should remain vigilant and watch for key reversal patterns to guide their trading decisions.