- EURGBP retreats after hitting resistance at 0.8325
- Broader downtrend remains intact, but momentum weakens
- Break below 0.8225 could confirm trend continuation
- Rebound above 0.8450 may signal bullish trend reversal
EURGBP traded lower this week, after hitting resistance near the key territory of 0.8325. Overall, the pair is trading below all three of the plotted moving averages, below the near-term downward sloping line drawn from the high of August 8, and well below the longer-term downtrend line taken from the high of February 2, 2023.
This keeps the overall outlook negative, but the short-term oscillators suggest that there may be another bounce before the next leg south. The RSI, although below 50, has ticked up, while the MACD, despite hovering below zero, has bottomed and just poked its nose above its trigger line. Both indicators detect weakening bearish momentum.
If or when the bears decide to take charge again, a dip below 0.8225 may be needed for the prevailing downtrend to extend. Such a dip would confirm a lower low and may see scope for declines towards the 0.8120 zone, marked by the inside swing highs of April 2016. If the sellers do not stop there, the next line of defense may be the round figure of 0.8000.
On the upside, a break above the long-term downtrend line and the key resistance zone of 0.8450 may be needed to confirm a bullish trend reversal. In such a case, the bulls may feel confident to climb towards the 0.8545 area, or even higher, to the 0.8525 zone, marked by the high of August 8.
To sum up, EURGBP remains in a downtrend and a dip below the latest low of 0.8225 could take the price into territories last seen back in 2016.
