The EUR/GBP pair has been trading within a range and has struggled to establish a clear trend. The technical indicators are showing a bearish divergence, hinting at a potential shift in momentum. The cross recently fell below the 20-day Simple Moving Average (SMA), which has further worsened the technical outlook and strengthened the short-term bearish bias.
In Monday’s session, the EUR/GBP pair declined and settled around the 0.8350 level, below the crucial 20-day SMA. This development has made it challenging for the bulls to regain control as they have been unable to sustain gains above the 0.8400 resistance level. The Relative Strength Index (RSI) currently stands at 45, indicating that the pair is in negative territory and below the 50-neutral threshold. The declining RSI suggests that selling pressure is increasing, adding to the bearish sentiment.
The Moving Average Convergence Divergence (MACD) is also painting a bearish picture, with the histogram showing a decrease in green bars, signaling a reduction in buying pressure. This further supports the idea that the bears are gaining control over the pair.
Key support levels for the EUR/GBP pair are seen at 0.8320, 0.8300, and 0.8280, while resistance levels are located at 0.8390, 0.8400, and 0.8430. A break below the 0.8300 level would provide the bears with more conviction and potentially lead to a further downside momentum.
In conclusion, the EUR/GBP pair’s inability to establish a clear trend coupled with bearish divergence in technical indicators suggests that a shift towards a bearish bias is likely. Traders should keep a close eye on key support and resistance levels for potential entry and exit points as the pair continues to navigate within its current range.
