The latest dovish rumblings from the Bank of England nL8N29H01VnL8N29F2F8 have put the skids under the pound and could lead to a critical week.
From a technical perspective, EUR/GBP could be entering into a bullish pattern and short-term range breakout.
It's not a runaway trend reversal from the mid-December 0.8278 low, but the week-ending Dec.
20 bullish engulfing line is now being felt.
Engulfing candles can be accurate warnings of a direction change.
The pattern was confirmed by a bull week followed by back-to-back hammer candles, which are very bullish.
A strong start to this week and a clear breach of the 10-WMA 0.8511 puts the cross on course to test the 0.8591 high from Dec.
This level stands out on the weeklies and a break could put a 38.2% Fibonacci retrace level at 0.8678 into play, the Fibo taken off the 0.9325 August 2019 high and 0.8278 low from December 13.
Other targets should a reversal take hold are at 0.8658 21-WMA and 0.8699 200-WMA.
EUR/GBP Weekly Candle Chart: Click here