EURGBP has been out of the spotlight over the past two months as the sideways pattern kept traders in a wait-and-see mode.
Today’s bearish action, however, seems to be worthy of attention as the price has locked a new lower low below the 2021 key support level of 0.8541.
In the four-hour chart, the technical oscillators suggest that negative forces could persist in the near term. The RSI, having failed to climb above its 50 neutral mark, is digging towards its 30 oversold level, while the Stochastics and the MACD are also pointing downwards, reducing the odds of a meaningful rebound.
If the bears claim the 0.8529 number, which is currently in defense, the decline could extend until the 0.8500 level. Lower, all attention will shift to April’s bottom of 0.8471 as any violation here will likely activate fresh selling towards 0.8400.
On the other hand, the 50- and 200-period simple moving averages (SMAs) have been capping upside corrections recently. Therefore, these lines currently at 0.8576 and 0.8600 respectively will be closely watched if the bulls return. The 0.8630 resistance could be the next obstacle, though neither of the above levels will generate new buying unless the price sets an exciting rally above the range roof of 0.8718.
Summarizing, EURGBP is currently in a disadvantageous position as the latest downfall has strengthened negative risks. A close below 0.8529 is expected to produce additional losses.
