EUR/GBP Price Analysis: Sell-off pauses and consolidates
|- EUR/GBP has slowed its decline and is consolidating after forming a temporary bottom.
- The trend remains bearish, however, there are signs the bear trend may be exhausted and about to reverse.
EUR/GBP has paused its sell-off within a falling channel. The pair temporarily broke below the bottom of the channel (shaded circle) before recovering and consolidating. This break may be a sign of exhaustion and the first faint signs of a reversal higher, however, it is too soon to tell.
EUR/GBP 4-hour Chart
So far, the recovery has been quite shallow and it is currently capped by resistance from the 50-period Simple Moving Average (SMA). Price would need to break decisively above the SMA and the line of highs at 0.8435 to provide a stronger bullish signal. Such a move would be expected to extend to the upper channel line at roughly 0.8450 where it would probably encounter reasonably tough resistance. A decisive break would be accompanied by a long green candle that closed near its high or three green candles in a row.
The short-term trend remains bearish, however, suggesting the odds continue to favor an extension lower. A break below 0.8406 (September 3 low) would pave the way for further weakness to a downside target at 0.8385 (July 17 lows).
The long-term trend (weekly chart) is still bearish whilst the medium-term trend is bullish
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.