Are more declines in store for EUR/GBP?
|EUR/GBP entered a tumbling mode this week, after hitting resistance at 0.8700 on Friday. On Monday, the rate fell sharply, breaking below the key support (now turned into resistance) zone between 0.8614 and 0.8623, and although it rebounded on Tuesday, the recovery was limited near that zone, from where the bears regained control and pushed the action back down. All that paints a negative technical picture in our view.
Today, the rate fell below yesterday’s low of 0.8581, a move that may have opened the way towards the 0.8556 barrier, marked as a support by the inside swing high of March 30th. A break below that support may extend the fall towards the 0.8534 or 0.8520 hurdles, where another dip could see scope for extensions towards the low of April 6th, at 0.8485.
Shifting attention to our short-term oscillators, we see that the RSI has just touched its toe below the 30 line, while the MACD remains below both its zero and trigger lines, pointing somewhat lower. Both indicators detect strong downside speed and support the notion for this exchange rate to continue drifting south for a while more.
Now, in order to abandon the bearish case and start examining whether the bulls have woken up, we would like to see a recovery back above the aforementioned key area between 0.8614 and 0.8623. Such a move may allow advances towards the 0.8665 obstacle, marked by the inside swing low of May 7th, the break of which could set the stage for the 0.8700 territory, which prevented the rate from moving higher on May 6th and 7th.
JFDBANK.com - One-stop Multi-asset Experience for Trading and Investment Services
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.