EUR/GBP Price Analysis: Bears attack multi-year-old support line below 0.8600
- EUR/GBP fades corrective pullback from one-year low, range-bound recently.
- Sustained break of key SMA on weekly chart joins bearish MACD to back the bears.
- 57-month-old support line offers extra filters to the south.
EUR/GBP wavers around 0.8580, currently down 0.30% to 0.8581, ahead of Wednesday’s European session. In doing so, the quote battles an upward sloping trend line from November 2015. The sterling cross recently dropped to the fresh low since February 2020 before bouncing off 0.8539.
Although oversold RSI conditions suggest corrective pullback on the daily chart, the weekly formation below 100 and 200-week SMA, amid bearish MACD, signal further downside of the EUR/GBP prices.
Hence a clear break of 0.8590 becomes necessary for the pair to extend the latest downward trajectory towards another support line from May 2016, at 0.8482 now.
In a case where EUR/GBP bears refrain from stepping back near 0.8480, the year 2019 low near 0.8275 will be in the spotlight.
On the upside, recovery moves are less likely to be considered strong unless witnessing a weekly closing beyond the key SMA convergence near 0.8840-45.
Overall, EUR/GBP has room for further downside despite uninterrupted declines since February 12.
EUR/GBP weekly chart
Trend: Bearish
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
