- EUR/GBP prints three-day losing streak, justifies downside break of 0.8770-75 confluence.
- Bearish MACD signals add strength to downside bias.
- Recovery moves need validation from 0.8815 to convince bulls.
EUR/GBP justifies the downside break of the previous key support confluence as it portrays a three-day downtrend near 0.8760 heading into Friday’s London open. In doing so, the cross-currency pair remains depressed around the Year-To-Date (YTD) lows marked earlier in the week.
A daily closing below the 0.8775-70 support-turned-resistance confluence, comprising the 100-DMA and an upward-sloping trend line from late December 2022 keeps EUR/GBP bears hopeful. Adding strength to the downside bias are the bearish MACD signals and lower high formation since March 08.
That said, the 61.8% Fibonacci retracement level of the pair’s upside from the last December to February, around 0.8710, seems to lure the EUR/GBP bears of late.
Following that, the December 20, 2022’s low near 0.8690 and the 200-DMA level surrounding 0.8685 could act as the key downside support to challenge the EUR/GBP bears, a break of which could quickly drag prices towards the late 2022 trough of near 0.8550.
Alternatively, recovery moves need to provide successful trading above the 0.8770-75 resistance confluence, previous support, to tease the EUR/GBP buyers.
Even so, a one-week-old descending resistance line, around 0.8815, precedes a three-week-old horizontal resistance, near 0.8835, to challenge the EUR/GBP buyers.
To sum up, EUR/GBP is likely to extend the latest south-run towards refreshing the YTD lows.
EUR/GBP: Daily chart
Trend: Further downside expected
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays weak near 1.0650 ahead of Eurozone PMI data
EUR/USD remains on the back foot near 1.0650 in European trading on Tuesday. Resurgent US Dollar demand amid a cautious risk tone weighs on the pair. Investors stay wary ahead of the preliminary Eurozone and US business PMI data.
GBP/USD eases below 1.2350, UK PMIs eyed
GBP/USD is dropping below 1.2350 in the European session, as the US Dollar sees fresh buying interest on tepid risk sentiment. The further downside in the pair could remain capped, as traders await the UK PMI reports for fresh trading impetus.
Gold could see a rebound before resuming the correction
Gold price sees a fresh leg down in Asia on Tuesday even as risk flows dissipate. Receding fears over Middle East escalation offset subdued US Dollar and Treasury bond yields. Gold remains heavily oversold on the 4H chart, rebound appears in the offing.
PENDLE price soars 10% after Arthur Hayes’ optimism on Pendle derivative exchange
Pendle is among the top performers in the cryptocurrency market today, posting double-digit gains. Its peers in the altcoin space are not as forthcoming even as the market enjoys bullish sentiment inspired by Bitcoin price.
Focus on April PMIs today
In the euro area, focus today will be on the euro area PMIs for April. The previous months' PMIs have shown a return of the two-speed economy with the service sector in expansionary territory and manufacturing sector stuck in contraction.