EUR/GBP price analysis: Bull struggle to hold ground and give up the 20-day SMA
- The EUR/GBP trades lower at 0.8540,with a 0.30% drop.
- Declining RSI on the daily chart stands indicative of mounting selling pressure.
- On a shorter four-hour chart span, flat indicators in negative territory after a sharp plunge during the European session.
In Tuesday's session, the EUR/GBP pair was seen taking a dip to 0.8540, falling below the 20-day Simple Moving Average (SMA). The mix of hawkish US Federal Reserve bets, rising US Treasury yields and negative Eurozone Retail Sales figures from December, drove down the cross. Technically speaking, bears still dominate the daily chart while indicators flattened in negative territory on the four-hour chart.
EUR/GBP levels to watch
Evaluating the daily chart, the lingering presence of selling pressure is evident. This is mirrored through the Relative Strength Index (RSI), which is traced in a downward trajectory in negative territory which signals the persistent dominance of sellers. The Moving Average Convergence Divergence (MACD) exhibits stability with flat green bars, pointing towards a restrained bullish traction. Moreover, the pair’s position under the 20, 100, and 200-day Simple Moving Averages (SMAs) underlines the prevailing bearish trend on a broader scale. The fact that the bulls failed to consolidate above the 20-day SMA also speaks of a bearish bias.
Shifting to the short-term technical outlook on the four-hour chart, it further underpins the bearish sentiment. The indicators are rather stale in the negative region, which were previously on a sharp descent during the European session. This combination of signals suggest that the cross may consolidate losses during the rest of the session but that the overall trend is still tilted to the downside.
EUR/GBP daily chart
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Author
Patricio Martín
FXStreet
Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.
