EUR/GBP – Bears Maintain Control Under 0.7235

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EUR/GBP - Bears Maintain Control Under 0.7235

The EUR/GBP has been consolidating since last week, but maintains a bearish bias. Let’s take a look at the charts.

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The 1H chart shows a market that came down to 0.7152 before shifting into a sideways consolidation. During this range, the resistance was in the 0.7230-0.7235 area, while the common support was around 0.7170.

Even in the 1H chart, there is still bearish bias as price holds under the 200-, 100-, and 50-hour simple moving averages (SMAs). Also, the RSI has held under 60, which reflects maintenance of the bearish momentum, albeit a weak one wince the RSI did not tag 30.

From the 4H chart, we can see that price is essentially holding under a double top or a range breakout. Which ever way you look at it, the indication is bearish. Price is poised to test the 0.7150-0.7155 support area today, and if EUR/GBP breaks below 0.7150, it should expose the 0.7014 low on the year. Before that, there might be some support around 0.7090.

A break above 0.7235 would be needed to shift this bearish outlook into a sideways or consolidation one. However, a break above 0.7275 would be needed to introduce bullish the bullish outlook back to the 0.7380-0.7385 highs.

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.