EUR/GBP has been showing signs of a potential downtrend after pulling back from the September 24 lows. Technical analysis indicates that the pair may continue its decline, as it has already reached the first downside target for the bear move that started at the August 5 high. The 61.8% extrapolation level is seen as a potential turning point for the pair.
On the daily chart, EUR/GBP is currently hovering around the 0.8317 level, with the next target at 0.8287, the August 2022 low. A break below the September 24 low could confirm the continuation of the downtrend. The Relative Strength Index (RSI) has also exited oversold territory, suggesting that a stronger correction may still occur before the pair resumes its downside movement.
Given the theory that “the trend is your friend,” it is likely that EUR/GBP will continue its short and medium-term downtrend. Traders are advised to keep an eye on the technical indicators and key support levels in order to gauge the direction of the pair in the coming days. A breakout below the current support level could signal a further decline in the pair.
Overall, EUR/GBP appears to have stalled in its pullback and may be on track to break lower. Traders should be cautious and monitor the pair closely for any potential signals of a continuation of the downtrend. While there is a possibility of a correction to the upside, the overall bias remains bearish for EUR/GBP in the near term. It is important for traders to exercise caution and implement proper risk management strategies when trading this pair.
