EUR/GBP Price Forecast: Breaks lower, extending downtrend

EUR/GBP has broken lower and extended its downtrend on Tuesday.
The RSI is showing a lack of bearish momentum accompanies the move and is converging with price.

Joaquin Monfort FXStreet

EUR/GBP breaks lower after a brief pullback and continues its broader downtrend on Tuesday.

EUR/GBP 4-hour Chart

The pair breaks below the 0.8317 September 24 low, confirming an extension of the downtrend towards the next target at 0.8287, the August 2022 low.

The Relative Strength Index (RSI) is converging bullishly with price when comparing the September 24 low and the current low (red dashed lines on chart). Although the current low is below that of September 24 the RSI is not. This non-confirmation signifies a lack of downside momentum accompanies the current sell-off and it might be a sign it will soon run out of steam.

EUR/GBP has already reached the first downside target for the move that began at the August 5 high, at 0.8322. This is the 61.8% extrapolation of the August sell-off before the shallow channel formed in early September. Further downside beyond the target could be a sign, therefore, of overextension.

Author

Joaquin Monfort

FXStreet

Joaquin Monfort is a financial writer and analyst with over 10 years experience writing about financial markets and alt data. He holds a degree in Anthropology from London University and a Diploma in Technical analysis.

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