The EUR/GBP has been consolidating for about a week, but looks poised to continue the downtrend after the price action in the past couple of sessions.
After rallying from 0.7405 to 0.7590, EUR/GBP retreated. It respected the 100-period SMA in the 4H chart, and a previous support area, thus maintaining the bearish bias. EUR/GBP was stalling at 0.7450 ahead of the BoE statement, but was unable to break above 0.75. Now it looks to be retreating again.
The 0.75 area was a previous resistance and where the 50-period SMA resided. The fact that EUR/GBP respected this as resistance shows that bears are back in control. The pair looks poised to run to 0.74-0.7495, with risk of breaking lower, upon breaking below 0.7450. Note that this week’s price action broke below a rising flag pattern, and today’s price action appears to be confirming this bearish breakout.
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