EUR/GBP Price Forecast: Triangle breakout to lead EUR/GBP towards 0.8410 

• UK announced new COVID restrictions for three nations, including Scotland, Whales, and Northern Ireland.
• Europe has already recorded more than 89 million cases with 1.5 million deaths, and the figures are continuously growing.
• EUR/GBP  is trading at 0.8445, having violated the symmetrical triangle pattern at 0.8465.

The EUR/GBP price forecast remains bearish as the pair has violated the symmetrical triangle pattern at the 0.8466 level. The day before, the EUR/GBP was moving under pressure, mainly because of the rising risk appetite in the market. That’s despite the increasing number of coronaviruses in Europe and the UK. Both economies were working hard to slow the spread of new coronavirus stains and mitigate their effects.

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COIVD-19 concern continues to weigh 

The UK announced new COVID restrictions for three nations, including Scotland, Whales, and Northern Ireland. These nations are fighting against the rising spread of the Omicron variant. In addition, social distancing and closure of the leisure industry, and the limits on the size of private gatherings were re-imposed in these three nations. However, PM Boris Johnson refrained from imposing further restrictions in England. On the other hand, the increasing prevalence of the Omicron variant in European countries prompted leaders to abandon coronavirus restrictions.Portugal and Germany announced post-Christmas restrictions and greater social distancing measures. Spain and France reported their highest number of daily cases since the pandemic, as France topped 100,000 daily cases. The World Health Organization has also warned that the growing number of cases across European countries could push their health systems towards the edge of a breakdown.

Finland has ordered bars and restaurants to close at 18:00 from December 28th, with limited seating for three weeks. Germany also announced that small gatherings of 10 people and nightclubs would not be allowed. France reported beginning the vaccination of children between the ages of 5 and 11, and Spain was also planning to implement new COVID-19 restrictions. According to the latest EU figures, Europe has already recorded more than 89 million cases with 1.5 million deaths, and the figures were continuously growing, causing the downfall of the euro and dragging EUR/GBP to the downside.

The market’s risk appetite returned after the US army announced that its scientists had prepared a COVID-19 vaccine that was not only effective against all variants of coronavirus but also previous SARS-origin viruses. The vaccine, however, had only gone through phase I trials, and phase 2 and phase 3 trials were still ongoing. The finding of unvaccinated and uninfected people to conduct these trials has been causing the delay. First, though, it provided hope to people, which raised optimism in the market, driving risk appetite higher. The market’s improved risk sentiment boosted the relatively risk-sensitive sterling, causing the EUR/GBP to fall.

Bank holidays 

The UK banks will be closed in observance of Christmas Day and new year’s eve. Except for Christmas and New Year’s Day, most Forex brokers are open on all holidays. Banks and stock exchanges have slightly varying holiday schedules. Banks handle the majority of foreign currency volume. When they are closed, the market becomes less liquid, and speculators gain greater market power. This might result in both unusually low and very high volatility.

Moreover, there were no macroeconomic figures to be released from either side; during this week, the Euro will be following the release of private loans and Spanish Flash CPI, and the GBP will be following the release of nationwide HPI in the coming days.

EUR/GBP price forecast – Daily technical levels

Support Resistance

0.8444 0.8454

0.8438 0.8458

0.8434 0.8464

Pivot Point: 0.8448

EUR/GBP price forecast – Triangle breakout to lead EUR/GBP towards 0.8410 

The EUR/GBP  is trading at 0.8445, having violated the symmetrical triangle pattern at 0.8465. However, for the moment, the support level has flipped to resistance. Therefore, the EUR/GBP pair will probably encounter a substantial load at 0.8465. In the 4-hour timeframe, the EUR/GBP pair’s significant resistance stays at the 0.8465 level. The formation of candles below 0.8465 indicates weakness in the uptrend; thus, the cross-currency pair can retrace to the 0.8480 level.

A surge in demand over 0.8480 may begin a rebound in the cross-currency pair. Unsurprisingly, technical indicators like RSI and Stock RSI signal indecision among investors. RSI is holding below 50, indicating a selling bias, while the Stoch RSI is holding at 75. Well, it’s primarily because of the holiday session around the globe.  

On the 4-hour timeframe, the EUR/GBP pair has formed a bearish engulfing pattern, supporting a downtrend. Moreover, the 50-day EMA (exponential moving average) signals the odds of a downswing in EUR/GBP. Thus, the breakout of 0.8480 support can create additional room for a downswing until 0.8445. On the other hand, increased buying pressure at the current market price can drive an uptrend until the 0.8545 or 0.8590 resistance, all the best, and stay tuned for more updates!