Following the preceding downtrend, the EUR/GBP continues to fall.
Cross forms a bearish technical pattern with lower lows and higher highs.
Before making any directional bets, momentum oscillators take a wait-and-see strategy.
During Asian trading hours on Friday, the EUR/GBP fell somewhat. The pair has given up some of its previous day’s gains and is now stuck near the 0.8600 level.
The EUR/GBP currency pair is currently trading at 0.8590, down 0.04 percent on the day.
The EUR/GBP cross has been under selling pressure on the daily chart since hitting a high of 0.8719 in April. The currency pair is moving inside the descending trend channel that begins at the specified level and ends at the mentioned level.
Bears are encouraged by a persistent decline below the 50-day Simple Moving Average (SMA) at 0.8600.
EUR/GBP might then test the horizontal support levels of 0.8575 and 0.8560.
With a neutral posture, the Moving Average Convergence Divergence (MACD) indicator trades close below the midline. Any drop in the MACD would lead bears to retest the previous day’s low in the 0.8540 region.
Alternatively, a persistent move above the 50-day SMA will signal the reversal of the current trend. In such case, the first upside objective appears to be in the area of horizontal resistance 0.8615.
The price action will run into resistance at the long term channel’s upper trendline.
If the barrier is successfully broken, the next target is the horizontal resistance level of 0.8625, followed by the June 10 high of 0.8642./n
