- EURGBP slides but finds support at the lower end of a range
- A break below that support may turn the outlook bearish
- Both the MACD and the RSI detect downside momentum
EURGBP entered a sliding mode on December 28, after hitting resistance slightly above 0.8700, the upper boundary of the broader sideways range that’s been containing most of the price action since the beginning of May 2023. That said, the slide was paused yesterday near the lower end of the range at around 0.8520, and today the pair is recovering somewhat.
The move confirming that the bears have regained full control and that the bigger picture has darkened, could be a decisive close below the 0.8520 barrier, which offered support on several occasions last year. Such a dip may allow declines all the way down to the 0.8405 zone, marked by the low of August 24, the break of which could aim for the low of August 2 at around 0.8340.
Both our daily oscillators detect bearish momentum, supporting the notion that, at some point soon, this pair may exit the range to the downside. The MACD lies below both its zero and trigger lines, while the RSI runs below 50, slightly above 30. However, the RSI shows signs of bottoming near 30, which implies that some further recovery may be in the works before the next leg south.
On the upside, a clear break above 0.8555 could signal that traders want to keep the pair range bound for a while longer. They may be willing to pull the price up to the 0.8650 zone, where another break could aim for the range’s upper end at around 0.8700.
To sum up, EURGBP lost notable ground during the first month of the new year, but all the losses were contained within a broader sideways range between 0.8520 and 0.8700. For the outlook to turn negative, a decisive dip below 0.8520 may be needed.
