EURGBP resumed its bearish direction after a short period of trading sideways, falling to a new five-month low of 0.8624 on Wednesday.
Market sentiment weakened following the rejection near the 20-day simple moving average (SMA) and there might be more selling activity in the short term given the negative trajectory in the momentum indicators. Still, with the price trading near the lower Bollinger band at 0.8630 and the RSI testing its 2022-2023 lows, a pause in the ongoing bearish action or an upside correction could be possible.
The former constraining zone of 0.8615, which acted both as support and resistance in the second half of 2022, could be the last chance for pivoting higher before the price potentially revisits the lower boundary of the bearish channel and its 2022 lows within the 0.8570-0.8555 zone.
In the event of an upside reversal above 0.8645, the bulls may push towards the 20-day SMA at 0.8690. If they crawl above the 0.8700-0.8725 border too, the door will open for the 200-day SMA and the channel’s upper band at 0.8762.
Note that the 50-day SMA is looking to cross below the 200-day SMA for the first time since January 2021, signaling a continuation of the current negative trend in the price.
In a nutshell, the bearish wave in EURGBP could gain new legs in the short term. Some congestion could emerge around 0.8615 before selling forces resurface.
Forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.
Recommended Content
Editors’ Picks
EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair keenly awaits the US PCE inflation data and Fed Chair Powell's speech for fresh hints on next week's price action.
GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday
GBP/USD trades sideways above 1.2600 amid a typical Good Friday trading lull. A broadly firmer US Dollar could keep any upside attempts limited in the pair ahead of the US PCE inflation data and Fed Chair Powell's appearance.
Gold price sits at all-time highs above $2,230, US PCE eyed
Gold price hit all-time highs at $2,236 on Thursday to finish Q1 2024 with a bang. Most major world markets, including the US are closed due to Holy Friday, leaving volatility around Gold price highly subdued. US PCE inflation and Powell are awaited.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.