The EUR/GBP has been consolidating since making a low on the year at 0.7014. The daily chart shows the pair in an ABC correction up to 0.7483. Let’s follow up on the technical development in the daily and 4H charts.
The daily chart shows a bearish engulfing candle. This price action is keeping EUR/GBP under the 100-day SMA. The pair has lost some bearish bias and momentum, but the engulfing candle is a strong indication that this is still a bear’s market, even though some might see a rising support just under 0.72.
Now looking at the 4H chart, we can see the sharp slide taking away the bullish momentum as the 4H RSI dipped below 40. However, price still needs to clear below the cluster of moving averages to truly reverse the trend back to the downside.
now if price bounces back above 0.74, we might have to shelve the bearish outlook. Instead, a bearish market should find resistance in the 0.7315-0.7360 area, which involves a couple of previous support pivots, and the 50-period SMA. So let’s watch this pullback and see the bears are indeed back in control.
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