- EUR/GBP extends the previous session’s declines on Tuesday.
- Multiple support formations near 0.8530 make it a critical level to trade.
- Momentum oscillators hold onto the overbought zone hints at more downside.
EUR/GBP edges lower on Tuesday in the early European trading hours. The pair hovers in a very narrow trade band with no meaningful traction. At the time of writing, EUR/GBP is trading at 0.8532, down 0.08% for the day.
EUR/GBP daily chart
On the daily chart, the EUR/GBP cross currency pair fell sharply after testing the high of 0.8658 on Wednesday. This constituted a double top formation with a high made on July 21. A double top candlestick technical formation is a bearish pattern. Furthermore, the spot slipped below the 21-day and 50-day Simple Moving Averages (SMA) strengthening the case for the probable downside momentum.
Having said that, if the price breaks the intraday low, the immediate downside target would emerge at the 0.8510 horizontal support level. The Moving Average Convergence Divergence (MACD) holds onto the overbought zone with a bearish crossover. Any downtick in the MACD would accelerate selling toward the low made on August 16 at 0.8483, followed by the 0.8460 horizontal support level.
Alternatively, if the price reverses direction, it could move back to the 0.8560 horizontal resistance zone. On a successful daily close above the 50-day SMA at 0.8563, the next upside target for EUR/GBP bulls could be the high of September 23 at 0.8589 followed by the key 0.8600 level.
EUR/GBP additional levels
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