EURGBP is edging sharply lower over the last few hours, recording a five-week low near the 0.8745 price level. It is worth mentioning that the pair has been consolidating in a downward sloping channel since September 2017. The neutral to bearish picture in the medium term looks to last for a while longer after prices failed to break above the upper channel earlier this month.
In the daily chart, the negative bias in the near term is supported by the deterioration in the momentum indicators. The MACD oscillator slipped into the negative territory during today’s European session and still holds below the trigger line. Furthermore, the RSI indicator is moving towards the 30 level with strong momentum.
If prices continue to head lower, support should come at 0.8730 before it falls until the 0.8685 barrier, which stands near the lower band of the channel. A drop below the latter level, would reinforce the bearish trend and touch the 0.8635 obstacle.
However, should an upside reversal take from after hitting 0.8730, immediate resistance will likely come from the 40-simple moving average (SMA) first and then from the 20-SMA at 0.8843 and 0.8860 respectively. A jump above this area could push the price towards the 0.8930 key level.
