EUR/GBP slides toward key 200-DMA support – Société Générale

FXStreet Insights Team FXStreet

EUR/GBP has extended its decline, with a clear pattern of lower highs and lows reinforcing the corrective trend. While a short-term bounce is possible, a break below the 200-DMA at 0.8630 could open the door to deeper losses, Société Générale's FX analysts note.

Descending channel pressures EUR/GBP

"EUR/GBP has extended its decline after encountering strong resistance near 0.8865 in November. The pair has been forming a sequence of lower highs and lows on the daily timeframe chart, signaling a corrective phase. It is now near the lower boundary of a descending channel and the 200-DMA around 0.8630."

"A short-term rebound cannot be ruled out; however, last week’s high at 0.8745 is likely to act as resistance. Failure to hold the MA at 0.8630 could trigger a deeper down move toward the August low at 0.8590 and 0.8555/0.8540."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD climbs as Fed’s Williams push the brakes on rates

The Aussie Dollar registers a gain of over 0.34% against the US Dollar on Tuesday as news flows remain quiet, with US data coming mixed, while hostilities in the Middle East continue. The AUD/USD trades at 0.6983.

USD/JPY extends retreat below 158.50 as intervention risks loom

USD/JPY is dropping below 158.50 in the Asian session on Tuesday, snapping a two-day winning streak and pulling back from an over two-week top touched the previous day, despite Japan's soft PPI inflation print. Bulls turn cautious amid speculation that authorities will step in to prop up the Japanese Yen, which, in turn, weighs on the pair.

Gold: Bears struggle to breach below $4,150

Gold now gives away its initial gains and resumes its decline, revisiting the $4,160 region per troy ounce on Tuesday. The precious metal’s pullback comes despite the fresh downward trend in the Greenback in combination with a mixed performance of US Treasury yields across the board and easing tensions on the geopolitical front.

Ethereum holds $2,500 as open interest drops to lowest level since February

Ethereum (ETH) quickly bounced back above $2,500 on Tuesday after sharp Asian equity selloffs briefly spilled into the crypto market. South Korea's KOSPI declined 5.4% while Japan's Nikkei 225 dropped by 1.8%. The volatility spike bled into cryptocurrencies, triggering a cascade of forced liquidations.

S&P 500 earnings just hit a record. The AI data centre bill hasn't landed yet

S&P 500 companies are on track for a third straight quarter of earnings growth above 25%, according to FactSet. Their profit margin hit 17% in the April-June quarter, the highest in FactSet data going back to 2009. The cash behind those earnings has been shrinking for two years, and almost all of the shrinkage is in the handful of companies building data centres for artificial intelligence (AI).

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?