EUR/GBP Price Analysis: Dives to 7-day lows below 0.8550, as bears stepped in

EUR/GBP pair drops to a new seven-day low of 0.8546, influenced by market expectations of a BoE rate hike and ECB's unchanged stance.
Technical analysis shows the pair struggling to break the 50-day SMA at 0.8582, maintaining a downtrend with a year-to-date low of 0.8492 in sight.
Despite the downtrend, a falling wedge pattern suggests an upside potential, with key resistance levels at 0.8572 and 0.8600 to watch.

Christian Borjon Valencia FXStreet

The Euro (EUR) loses ground against the Pound Sterling (GBP) amid a risk-on impulse, as well as expectations for interest rates staying unchanged by the European Central Bank (ECB). At the same time, the Bank of England (BoE) is seen by market analysts as the only one to raise rates by 25 bps in September. That, alongside technical resistance, dragged the EUR/GBP to a new seven-day low, as the pair trades at 0.8546 after hitting a high of 0.8559.

EUR/GBP Price Analysis: Technical outlook

The daily chart portrays the pair tested the 50-day Simple Moving Average (SMA) at 0.8582, but buyers failed to pierce it on the upside, so the cross extended its losses toward current exchange rates. Due to the pair registering a successive series of lower highs and lows, the downtrend is intact, and if the pair breaches the year-to-date (YTD) low of 0.8492, August 24, 2022, would be tested at 0.8408.

On an intraday bias, the EUR/GBP is trending down but is forming a falling wedge, a bullish chart pattern, that could pave the way for further upside. If the cross breaks to the upside, the first resistance would be the 200-hour SMA (HSMA) at 0.8572, followed by the psychological 0.8600 figure and last week’s high of 0.8610.

If the pair manages to remain within the chart pattern, further downside is seen at the bottom of the falling wedge at around 0.8530/20, which, if broken, the EUR/GBP could plunge towards the YTD low of 0.8492.

EUR/GBP Price Action – Hourly chart

EUR/GBP

Overview
Today last price	0.8547
Today Daily Change	-0.0012
Today Daily Change %	-0.14
Today daily open	0.8559

Trends
Daily SMA20	0.8578
Daily SMA50	0.8585
Daily SMA100	0.8635
Daily SMA200	0.8714

Levels
Previous Daily High	0.8573
Previous Daily Low	0.8548
Previous Weekly High	0.8611
Previous Weekly Low	0.8548
Previous Monthly High	0.8669
Previous Monthly Low	0.8493
Daily Fibonacci 38.2%	0.8564
Daily Fibonacci 61.8%	0.8558
Daily Pivot Point S1	0.8547
Daily Pivot Point S2	0.8535
Daily Pivot Point S3	0.8522
Daily Pivot Point R1	0.8572
Daily Pivot Point R2	0.8586
Daily Pivot Point R3	0.8598

Author

Christian Borjon Valencia

FXStreet

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

GBP/USD revisits 1.3530; Dollar pushes harder

GBP/USD adds to the weekly correction and recedes toward the 1.3530 zone on Friday. Indeed, Cable faces increasing selling pressure on the back of extra gains in the Greenback, particularly fuelled by Chair Warsh’s speech at the Jackson Hole Symposium and the US NFP Annual Revision (-79K).

EUR/USD breaches below 1.1600, multi-day lows

EUR/USD now accelerates its decline and retreats to seven-day troughs in the sub-1.1600 region at the end of the week. The pair’s pullback comes on the back of the strong rebound in the US Dollar after Chair Warsh delivered a hawkish message in Jackson Hole, while the US NFP Annual Revision came in at -79K.

Gold resumes downside toward $4,400 despite US Dollar pullback

Gold gives up recovery and resumes its downside toward $4,400 in the Asian session on Monday. Fed Chair Kevin Warsh’s Jackson Hole speech was perceived as hawkish, raising expectations for a September rate hike. Adding to this, fresh US strikes on Iran act as a tailwind for the safe-haven US Dollar and should cap the bullion.

Week ahead: RBNZ and BoC decide on rates ahead of all-important US NFP

The US dollar staged a modest recovery this week, perhaps as traders decided to cover some of their short positions amid slightly stickier or in-line US PCE inflation numbers for July, confounding expectations of softer prints amid the softness revealed in the CPI data for the month.

US Dollar Weekly Forecast: Focus is back on 100.00 as Fed hawks take centre stage

It has already been a positive week for the US Dollar, but a hawkish speech from Chair Kevin Warsh at the Jackson Hole Symposium may have laid the groundwork for a more sustained rebound in the Buck.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.