EUR/GBP Price Forecast: Death-cross in the 4-hour chart opens the door for a test of YTD low
|- The EUR/GBP slides some 0.05% during the New York session.
- A mixed-market mood keeps the pair seesawing between gaining/losing.
- EUR/GBP Price Forecast: Death-cross in the 4-hour chart pave the way for further losses.
The EUR/GBP extends its Monday’s losses, trading at 0.8423 during the New York session at the time of writing. The market sentiment is mixed, as US equity indices fluctuate between gainers and losers, though the S&P 500 printed an all-time high at 4,807, the Nasdaq retreats almost 1% at press time.
The Covid-19 outbreak continues. On Tuesday, cases worldwide reached a new daily high above 1.449 million cases amid the spread of the newly discovered strain called Omicron.
In the overnight session, the EUR/GBP remained subdued in the Asian session. But as European traders got to their desks, risk appetite weighed on the shared currency, which has been as of lately a safe-haven play, dipped as low as 0.8400, to then reverse its curse, stabilizing around the December 27 daily low at 0.8422.
EUR/GBP Price Forecast: Technical outlook
The EUR/GBP 4-hour chart depicts a formation of a falling wedge, but, at the same time, the 50-simple moving average (SMA) crossed below the 200-SMA, forming a death cross a bearish signal. Furthermore, the Relative Strength Index (RSI), a momentum indicator at 38.21 despite aiming up, stills in bearish territory, so a downward move is on the cards.
On the way down, the EUR/GBP’s first support would be the psychological 0.8400. A breach of the latter would expose the YTD low at 0.8380.
To the upside, EUR/GBP’s first resistance would be the December 28 daily high at 0.8430. A break of that level would open the door for further gains. The next line of defense for GBP bulls would be the December 24 daily high at 0.8463, followed by the December 23 daily high at 0.8497.
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