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EURGBP Price Breaks Lower, Further Falls Possible

EURGBP Price Breaks Lower, Further Falls Possible

Martin Essex, MSTA,

EURGBP price, news and analysis:

  • EURGBP has dropped to its lowest level since April and further losses seem plausible.
  • The April 17 low at 0.8620 is a reasonable first target.

EURGBP price under pressure

EURGBP has fallen steeply over the past three sessions, closing a gap on the daily chart and dropping to its lowest level for seven months. With a downward trend now firmly established, losses could extend further – with the April 17 low at 0.8620 a possible first target.

EURGBP Price Chart, Daily Timeframe (January 30 – November 13, 2018)

Latest EURGBP price chart.

Chart by IG

If that level is broken, there is little support for the pair before a long-term trendline just under 0.85 and then the Spring 2017 lows of 0.8384 touched on May 10 and 0.8313 reached on April 18. Meanwhile, there is resistance at 0.8798 from the 20-day moving average, at 0.8828 from the 50-day dma and 0.8889 from the 100-day dma, as well as from a trendline that checks in at 0.8906.

This technical weakness is backed by fundamental factors, with the Euro under pressure from the row between Italy and the European Union over the Italian Budget while the Pound is benefiting from rising hopes of a Brexit deal between the EU and the UK.

Note too that retail traders remain net-long the pair and a contrarian view of crowd sentiment also suggests that further losses are possible.

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--- Written by Martin Essex, Analyst and Editor

Feel free to contact me via the comments section below, via email at martin.essex@ig.com or on Twitter @MartinSEssex

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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