Today, we present you a mid-term investment overview of the EUR/GBP pair.

If we compare the state of the European and British economies over the last quarter, then the stronger positions of the European Central Bank (ECB) are obvious, which has not only achieved success in combating inflation, which is systematically approaching the stated goal of 2.0%, but also began to reduce interest rates before the Bank of England (BoE), trying to level the pressure on businesses and households after a long period of crisis in the economy: at the moment, the values are held at 4.25% and 5.00%, respectively.

So, according to preliminary data, the consumer price index in the EU may drop to 2.4% from 2.6% at the end of June, while in the UK inflation accelerated from 2.0% to 2.2% in July, which is likely to act as a driver for slowing economic activity: experts believe that by the end of June the UK gross domestic product (GDP) will be adjusted from 0.4% to 0.1%, while the same indicator for the EU in the second quarter may grow by 0.3%, providing an annual increase from 0.4% to 0.6%. Thus, a possible new reduction in the key rate by the ECB will give the single currency a slight advantage over the British pound, which at best will remain at current levels.

In addition to the underlying fundamental factors, the continued growth of the EUR/GBP pair is confirmed by technical indicators: on the W1 chart, the instrument moves within the "triangle" pattern with narrowing boundaries of 0.8560–0.8360.

After another attempt to overcome the resistance line of the pattern, the price is still holding above it and is preparing to continue growing to the nearest maximum of 0.8610, consolidation above which will mean the beginning of the pattern implementation.

Key levels can be seen on the D1 chart.

As can be seen on the chart, the price has almost completed the reverse testing of the resistance line of the descending channel with the boundaries of 0.8540–0.8350 and is already preparing for a reversal towards growth.

In the area of the annual minimum of July 8 at 0.8390, there is a zone of cancellation of the buy signal; if the price reaches it, the ascending scenario will either be canceled or noticeably delayed in time, and long positions should be liquidated.

Near the maximum of September 26, 2022, at 0.8960, there is a target zone; if it's reached, profit should be taken on open buy positions.

In more detail, trade entry levels can be evaluated on the H4 chart.

The entry level for purchase transactions is located at 0.8610, which coincides with the maximum of last week. Technically, a breakout of the local maximum will be implemented and a confirmation to open positions will be formed.

Given the average daily volatility of the EUR/GBP pair over the past month, which is 317.0 points, movement to the target zone of 0.8960 may take about 45 trading sessions; however, with strengthened dynamics, this time may be reduced to 37 trading days.