EUR/GBP Price Analysis: After filling the gap price rolls over threatening more downside
|- EUR/GBP has risen and filled the price gap that was open between 0.8472 and 0.8490.
- There is a chance it may have completed its upside correction now and the downtrend could resume.
- A break below the June 28 low would help confirm a resumption lower.
EUR/GBP continues correcting back after bottoming at the 0.8398 June 14 lows. It has now filled a price gap on the charts (red shaded area) increasing the odds the correction may be near to completion.
EUR/GBP Daily Chart
Given the pair appears to be in a medium-term downtrend and “the trend is your friend” it will probably resume moving lower once the pull-back runs out of steam. A break below 0.8447 (June 28 low) would help confirm such a resumption.
The initial target for a move lower would be the 0.8399 June 14 low.
EUR/GBP 4-hour Chart
The Relative Strength Index (RSI) on the 4-hour chart has exited overbought, further suggesting the correction may have run its course and be turning lower. When RSI exits overbought in a countertrend move such as that on EUR/GBP, it is often a reliable indicator the main trend is resuming.
Alternatively, a break above the 0.8499 highs would indicate a continuation of the correction higher, with the 50-day Simple Moving Average at 0.8517 providing the next resistance target to the upside.
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.