EUR/GBP Price Analysis: Oscillates around 0.8750s on a strong pound
- EUR/GBP drops below the 20-day EMA, aiming to extend the downtrend towards 0.8700.
- If the EUR/GBP breaks below 0.8744, it will expose crucial supports at around 0.8736, 0.8700, and the S3 pivot at 0.8671.
The EUR/GBP is on the defensive, dropping for the first time in the last six days amid a risk-on impulse weighing on the shared currency. At the time of writing, the EUR/GBP is trading at 0.8756, below its opening price, after hitting a daily high of 0.8807.
EUR/GBP Price Forecast
The EUR/GBP daily chart shows the pair faced solid resistance at the 20-day EMA at 0.8783, which was briefly broken, though, the pair retreated, and it’s trading at around October 10 lows. Therefore, the EUR/GBP is range-bound, with price action contained between the high/low of yesterday, but as it printed a fresh 3-day low, the path of least resistance is downwards. A break below 0.8744 could tumble the pair towards 0.8725, ahead of the 0.8700 mark.
The one-hour time frame illustrates the EUR/GBP as range-bound, even though price action it’s below the 20, 50, 100, and 200-EMAs, with all trapped in the 0.8760-0.8777 range. Traders should be aware that even though the Relative Strength Index (RSI) is below the 50-midline unless the EUR/GBP decisively breaks below 0.8736, October 7 daily low, it would likely remain subdued.
If the above scenario plays out, the EUR/GBP next support would be 0.8700, followed by the S3 daily pivot at 0.8671.
EUR/GBP Key Technical Levels
Author
Christian Borjon Valencia
FXStreet
Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.
