EURGBP – Multi-Timeframe Weekly Support Reversal SetupEUR/GBPOANDA:EURGBPAamna_QureshiEURGBP is trading within a major Weekly support zone that has historically generated strong bullish reactions, most notably in July 2022, July 2024, and May 2025. After nearly eighteen months, price has returned to this area while showing early signs of trend exhaustion. The bullish thesis is further enhanced by bullish RSI divergence on both the 1-hour and 4-hour timeframes, signaling weakening bearish momentum. Adding further confluence, FXBook sentiment data shows that approximately 95% of traders are currently positioned long on EURGBP. Meanwhile, price remains compressed beneath a descending trendline that has capped the broader decline, making a breakout above this structure will be the first meaningful signal that buyers are regaining control. From a macro perspective, EURGBP remains sensitive to the policy outlook of the ECB and Bank of England. Upcoming UK GDP data and speeches from ECB officials, including Christine Lagarde, could act as catalysts for increased volatility. Softer UK economic data or a relatively hawkish ECB tone would support a bullish reversal scenario, while stronger UK data or a dovish ECB stance could delay upside momentum. Technically, with price positioned at a historically significant Weekly support area and multiple technical and sentiment-based factors aligning, the overall bias favors a bullish reversal. However, confirmation through a trendline and neckline breakout remains essential before increasing exposure. Preferred Strategy: Wait for a confirmed neckline breakout before committing significant capital. Aggressive traders may participate after a bullish rejection from Weekly support, while higher-probability entries are available either at the retest of the broken descending trendline or at the retest of the neckline following confirmation of the reversal. ________________________________________ Trade Plan 1: Aggressive Weekly Support Reversal Entry For traders seeking early participation in the reversal, the first opportunity comes before the major breakout confirmations occur. This setup provides the best risk-to-reward profile but carries greater risk because neither the trendline nor the neckline has been broken yet. Therefore, take less risk at this level. Execution Strategy •Wait for the close of a bullish 4-hour Heikin-Ashi candle after bullish divergence •Enter two long positions immediately after confirmation. •Risk 0.20% per position. •Total account risk: 0.40%. •Stop-loss below the recent swing low. •First target at the neckline resistance. •Once price reaches first target, move stop-loss to breakeven. •Allow the remaining position to target higher resistance levels. ________________________________________ Trade Plan 2: Descending Trendline Breakout Setup Following the aggressive support entry, the next opportunity comes after a confirmed breakout of the descending trendline. This provides the first sign that selling pressure is weakening and buyers are stepping in. Although the bullish reversal is not fully confirmed until a neckline breakout, this setup offers better risk-to-reward potential. However, due to the higher chance of a stop-out, a smaller position size is recommended. Execution Strategy •Wait for a confirmed breakout above the descending trendline. •Open a position with 0.40% risk above the latest resistance of 15 min Timeframe (Cambist redlines) •Place stop-loss below the recent swing low (Cambist blue lines) •First target at the neckline resistance. •Once price reaches the neckline area, secure partial profits or move stop-loss to breakeven. •Hold the remaining position for the Weekly resistance zone i.e., approximately 1:4 Risk-to-Reward. ________________________________________ Trade Plan 3: Conservative Neckline Retest Entry The most conservative approach is to wait for a confirmed neckline breakout and enter only after the neckline has been successfully retested as support. This is the highest-probability setup because the market has already confirmed the bullish reversal through a neckline breakout and successful retest. While the risk-to-reward is slightly lower than Trade Plan 2, the additional confirmation increases confidence in the trade and justifies the larger position size. Execution Strategy •Wait for a decisive breakout and acceptance above the neckline resistance. •Enter long with 0.60% risk on a successful retest of the neckline as support, confirmed by bullish price action preferably a bullish Heikin candle at neckline. •Combined exposure across Trade Plans 2 and 3 is 1.00% •Place stop-loss below the swing low. •Target 0.84513, aligned with the Weekly resistance zone ________________________________________ Invalidation Level A sustained breakdown below the Weekly support zone, accompanied by failure of the current bullish divergences, would invalidate the bullish thesis and suggest continuation of the broader downtrend. Additionally, stronger-than-expected UK GDP or inflation data, or unexpectedly dovish comments from ECB officials, could strengthen GBP relative to EUR and delay or invalidate the bullish reversal scenario. In that scenario, the focus would shift back toward selling rallies and identifying continuation patterns in line with the dominant bearish trend. ________________________________________ Trader's Summary EURGBP is testing a major Weekly support zone while displaying bullish divergence across multiple timeframes, suggesting bearish momentum is weakening. Sentiment data further supports the potential for a reversal from this key area. The strategy offers a progression of entry opportunities, beginning with an aggressive support-based entry, followed by a higher risk-to-reward entry on a descending trendline breakout, and finally the highest-conviction entry after a confirmed neckline breakout and retest. While each stage provides increasing confirmation of a bullish reversal, the overall objective remains participation in a potential move toward Weekly resistance. As long as Weekly support remains intact, the bias favors a bullish reversal toward the Weekly resistance zone. A breakdown below support would invalidate the bullish scenario and shift the bias back to bearish continuation.