EURGBP reached strong resistance: Likely reversal incomingPrice has been in a strong impulsive rally, pushing aggressively into a well established resistance zone. This zone is marked by a prior sharp sell-off, suggesting it could trigger selling interst again.
The current move appears overextended in the short term. The ascending channel is extremly vertical, showing momentum, but this type of movement often leads to exhaustion, especially when met with a key zone like so. Volume profile shows a lack of recent trading activity at these levels, which can exaggerate volatility once price enters this area.
Given how clean and one-sided the climb has been, a pullback is not only likely, but it would be healthy. The projected reaction toward the 0.85800 area makes sense technically: it corresponds with key Fibonacci retracement levels (between 0.5 and 0.618), adding confluence to the idea of a corrective move before any continuation or reversal.
Until there’s a clear break above the upper bound of this zone with sustained volume, this remains a high-probability area for short-term rejection or distribution.
If price starts printing long upper wicks, slowing momentum, or bearish engulfing patterns on lower timeframes, that could offer early signals of weakness and a shift in momentum.
Just sharing my thoughts on support and resistance, this isn’t financial advice . Always confirm your setups and manage your risk properly.
Disclosure: I am part of Trade Nation's Influencer program and receive a monthly fee for using their TradingView charts in my analysis.
