EUR/GBP outlook: Falls to one month low on fresh political tremors from Germany
EUR/GBP
EURGBP lost ground on Tuesday after surprise failure of Germany’s Merz to win support from parliament to become a chancellor on the first round of voting.
The pair fell to one-month low and dented strong supports at 0.8480 (Fibo 61.8% of 0.8320/0.8738 upleg/daily lower base).
Firm break here is needed to validate fresh bears and generate initial signal of continuation of larger downtrend from 0.8738 (2025 peak, posted on Apr 11) which extends into fourth consecutive week.
Although bears faced headwinds at 0.8480 pivot, presented by quick bounce from new low at 0.8461, technical picture on daily chart is weak and expected to support bears.
Near-term action has been repeatedly capped by falling 10DMA after it crossed below 20DMA last week, while 14-d momentum is heading deeper into negative territory.
Loss of 0.8480 trigger to expose 55DMA (0.8430) and Fibo 76.4% (0.8416) which guard converged 100/200DMA’s (0.8389).
Upticks should stay under 10DMA (0.8509) to keep bears fully in play, but caution on further hesitation at 0.8480 zone, which may keep the price action in extended consolidation.
Res: 0.8509; 0.8529; 0.8548; 0.8578.
Sup: 0.8461; 0.8430; 0.8416; 0.8389.
Author
Slobodan Drvenica
Windsor Brokers
Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.
