EUR/GBP Weekly Breakout With Potential Retest Toward 0.85On the weekly timeframe, EUR/GBP has broken above a long-standing descending trendline that has acted as dynamic resistance since late 2022. This trendline has been respected multiple times, as shown by the repeated rejections near the line, indicating strong selling pressure in previous attempts. However, the recent bullish breakout marks a potential shift in the market structure.
After a clean break above the descending trendline, price has started to retrace toward the breakout zone. This behavior is typical and aligns with classical technical analysis, where previous resistance often turns into new support. The region around the broken trendline, particularly near the psychological level of 0.8500, now becomes a key area to watch for a retest and potential bounce.
A successful retest around 0.835–0.84 could signal continuation of the bullish breakout, with 0.8500 serving as the next key resistance and potential short-term target. A rejection from this area, combined with bullish candlestick confirmation, could offer a favorable long entry opportunity. However, if the retest fails and price falls back below the trendline, it would invalidate the breakout structure and could indicate a false breakout scenario.
Trade Plan:
Retest Entry Zone: 0.8350–0.8400 (look for bullish confirmation)
Target: 0.8500 (psychological resistance)
Stop-Loss: Below 0.8300 (to invalidate trendline support)
This setup reflects a textbook breakout-and-retest structure, offering a clear technical roadmap supported by trendline theory and psychological level behavior. Traders should wait for confirmation before committing to a position.
Disclaimer: This analysis is part of a trading plan and does not constitute trading advice. Always apply proper risk management in every trading decision.
