EUR/GBP Price Analysis: Drops to fresh weekly lows, around mid-0.8500s post-ECB


  • EUR/GBP remained under some heavy selling pressure for the second straight session on Thursday.
  • The selling bias picked up pace after the ECB decision and dragged the cross to fresh weekly lows.
  • The bias might have shifted in favour of bearish traders and supports prospects for further losses.

The EUR/GBP cross extended this week's retracement slide from near two-month tops and witnessed some heavy selling for the second straight session on Thursday. The selling bias picked up pace after the ECB announced its policy decision and dragged the cross to fresh weekly lows, around the 0.8555 region in the last hour.

As was widely anticipated, the European Central Bank left its key monetary policy settings unchanged at the conclusion of the July meeting and did little to provide any meaningful impetus. The ECB revised the forward guidance on rates and expects rates to remain at their present or lower levels until it sees inflation reaching 2% well ahead of the forecast horizon.

From a technical perspective, the EUR/GBP cross has now dropped back below the 61.8% Fibonacci level of the 0.8504-0.8670 strong move up. This coincided with a multi-month-old descending trend-line resistance breakpoint. A sustained break below could be seen as a fresh trigger for bearish traders and might have already set the stage for additional weakness.

The negative outlook is reinforced by the fact that technical indicators on the daily chart have again started drifting into bearish territory. Hence, a subsequent downfall towards the 0.8535-30 intermediate support, en-route the key 0.8500 psychological mark, or monthly lows touched last week, now looks a distinct possibility.

On the flip side, any meaningful recovery attempt now seems to confront stiff resistance near the 0.8585 confluence region – comprising 50% Fibo. level and 100-day SMA. A sustained strength beyond will shift the bias back in favour of bullish traders and push the EUR/GBP cross further beyond the 0.8600 mark, back towards testing the 0.8670 supply zone.

EUR/GBP daily chart

fxsoriginal

Technical levels to watch

EUR/GBP

Overview
Today last price 0.8563
Today Daily Change -0.0039
Today Daily Change % -0.45
Today daily open 0.8602
 
Trends
Daily SMA20 0.8577
Daily SMA50 0.859
Daily SMA100 0.8604
Daily SMA200 0.8768
 
Levels
Previous Daily High 0.8659
Previous Daily Low 0.8597
Previous Weekly High 0.858
Previous Weekly Low 0.8504
Previous Monthly High 0.8646
Previous Monthly Low 0.8531
Daily Fibonacci 38.2% 0.8621
Daily Fibonacci 61.8% 0.8635
Daily Pivot Point S1 0.858
Daily Pivot Point S2 0.8557
Daily Pivot Point S3 0.8518
Daily Pivot Point R1 0.8641
Daily Pivot Point R2 0.8681
Daily Pivot Point R3 0.8703

 

 

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