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.

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