Technical Analysis – Could EURGBP bulls react to the mounting bearish pressure?
September 6, 2023 8:28 am
EURGBP is registering its first green candle after five consecutive red candles as the bulls are trying to engineer some sort of advance. Since the February 3, 2023 high of 0.8978, EURGBP has been on a steady downward path with the equivalent trendline repeatedly proving to be a very significant resistance point. In addition, the bulls would potentially have to encounter a questionable and very complex head-and-shoulders pattern.
In the meantime, the momentum indicators side mostly with the bears. The Average Directional Movement Index (ADX) has risen above its 25-threshold, signaling a decent bearish trend in the market, and the RSI is tentatively hovering below its 50-midpoint. More importantly, the stochastic oscillator has broken below its moving average and appears to be heading towards its oversold territory, revealing bearish pressure in the EURGBP pair.
Should the bears remain confident, they would try to finally break the 0.8503 level and the outer neckline of the aforementioned complex structure. They would then be able to record a new 2023 low, with the path lower being clear until the June 22, 2009 low at 0.8401.
On the other hand, the bulls are desperately trying to stage a rally. The first resistance point comes at the 50-day simple moving average (SMA) at 0.8578 with the 0.8624-0.8635 region coming up next. This is populated by the February 10, 2009 high, 100-day SMA and the key February 3, 2023 downward sloping trendline. Even higher, the bulls could have a go at testing the resistance set by the busier 0.8670-0.8720 area.
To sum up, with the momentum indicators’ stance and the developing bearish pattern potentially pointing to another downward wave in EURGBP, the 0.8504 support level holds all the cards.
EURGBP is registering its first green candle after five consecutive red candles as the bulls are trying to engineer some sort of advance. Since the February 3, 2023 high of 0.8978, EURGBP has been on a steady downward path with the equivalent trendline repeatedly proving to be a very significant resistance point. In addition, the bulls would potentially have to encounter a questionable and very complex head-and-shoulders pattern.
In the meantime, the momentum indicators side mostly with the bears. The Average Directional Movement Index (ADX) has risen above its 25-threshold, signaling a decent bearish trend in the market, and the RSI is tentatively hovering below its 50-midpoint. More importantly, the stochastic oscillator has broken below its moving average and appears to be heading towards its oversold territory, revealing bearish pressure in the EURGBP pair.
Should the bears remain confident, they would try to finally break the 0.8503 level and the outer neckline of the aforementioned complex structure. They would then be able to record a new 2023 low, with the path lower being clear until the June 22, 2009 low at 0.8401.
On the other hand, the bulls are desperately trying to stage a rally. The first resistance point comes at the 50-day simple moving average (SMA) at 0.8578 with the 0.8624-0.8635 region coming up next. This is populated by the February 10, 2009 high, 100-day SMA and the key February 3, 2023 downward sloping trendline. Even higher, the bulls could have a go at testing the resistance set by the busier 0.8670-0.8720 area.
To sum up, with the momentum indicators’ stance and the developing bearish pattern potentially pointing to another downward wave in EURGBP, the 0.8504 support level holds all the cards.
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