EUR/GBP Price Analysis: Bears take control below 50-day SMA near 0.8600
- EUR/GBP continues to drift lower following the previous downside momentum.
- Cross makes lower lows and lower highs technical pattern, a bearish formation.
- Momentum oscillators adopt a wait-and-watch approach before any directional bet.
EUR/GBP edges lower on Friday in the Asian trading hours. The pair lost part of its previous day’s gains and stalls near the 0.8600 mark.
At the time of writing, EUR/GBP is trading at 0.8590, down 0.04% for the day.
EUR/GBP daily chart
-637613866004664762.png)
On the daily chart, the EUR/GBP cross has been under selling pressure from April's high at 0.8719. The currency pair moves inside the descending trend channel, which extends from the mentioned level.
A sustained move below the 50-day Simple Moving Average (SMA) at 0.8600 makes bears hopeful.
In doing so, EUR/GBP could test the 0.8575 and the 0.8560 horizontal support levels.
The Moving Average Convergence Divergence (MACD) indicator trades just below the midline, with a neutral stance. Any downtick in the MACD would prompt bears to retest the earlier day’s low in the vicinity of 0.8540 area.
Alternatively, if the price makes a sustained move above 50-day SMA, it will mark the reversal of the prevailing trend. In that case, the first upside target emerges in the vicinity of 0.8615 horizontal resistance area.
The price action will meet the resistance at the upper trendline of the long-term channel.
A successful break of the barrier would seek the 0.8625 horizontal resistance level, followed by June 10 high at 0.8642.
EUR/GBP additional levels
Author
Rekha Chauhan
Independent Analyst
Rekha Chauhan has been working as a content writer and research analyst in the forex and equity market domain for over two years.
