The EURGBP has held within a broad range between 0.7700-0.8190 since March, and a breakout to the downside looks imminent as the pair reached a peak in September.
Currency Pair: EUR/GBP Chart: 60 Min Charts Short-Term Bias: Bearish
Analysis Update
Price action for the EURGBP has stalled around 0.7806 (21.4% Fib level of 0.7701-0.8189), and looks to be forming a base at this level. In addition, a bullish RSI divergence looks to be unfolding, and as a result, we may see the pair move higher over the remainder of the trading session. However, the decline in the 120 SMA has favored a bearish outlook for the euro-pound, and I anticipate the pair to break below 0.7700 over the week, and we may see the pair work its way towards the 3/18 low of 0.7596 over the following week. Meanwhile, the fundamental event risks scheduled for the next 24 hours may call for a change in our outlook.
Analysis
The EURGBP has held within a broad range between 0.7700-0.8190 since March, and a breakout to the downside looks imminent as the pair reached a peak in September. After failing to move above 0.8200, the pair has fallen quiet drastically to hold at the lower end of its range. Late last week, we saw the pair jump to a high of 0.8072, but the gain was short lived as the pair tumbled lower to hold near 0.7800. However, the divergence from the 120 SMA suggests that the pair will move higher over the next few hours, but I anticipate the downward momentum to drag the pair lower over the week. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.
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