- 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.
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
|Today last price||0.8547|
|Today Daily Change||-0.0012|
|Today Daily Change %||-0.14|
|Today daily open||0.8559|
|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|
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.