Technical Analysis – EURGBP trades flat near 5-month low
May 17, 2023 3:28 pm
EURGBP had been trading sideways since the beginning of the year before its range broke to the downside and the pair recorded a fresh five-month bottom of 0.8659 in mid-May. However, the paid failed to extend its retreat, with the price trading flat in the past week.
The momentum indicators currently suggest that bearish forces are in control. Specifically, the RSI is flatlining below its 50-neutral mark, while the MACD histogram is softening beneath zero and its red signal line.
If negative tendencies persist, the pair could initially challenge its five-month low of 0.8659. A break below that zone would send the price towards levels not seen in months, where the October bottom of 0.8570 might provide downside protection. Further declines could then come to a halt at the December 2022 low of 0.8546.
To the upside, should the pair reverse higher, the previous support of 0.8720 might serve as resistance in the future. Conquering this barricade, the bulls could target the April high of 0.8874 before 0.8928 comes under examination. Even higher, the 2023 peak of 0.8978 may prove to be a tough obstacle for the price to overcome.
In brief, EURGBP is likely to come under more selling pressure as near-term risks remain tilted. Nevertheless, a potential upside correction should not be ruled out in the case that the pair fails to post a fresh lower low.
EURGBP had been trading sideways since the beginning of the year before its range broke to the downside and the pair recorded a fresh five-month bottom of 0.8659 in mid-May. However, the paid failed to extend its retreat, with the price trading flat in the past week.
The momentum indicators currently suggest that bearish forces are in control. Specifically, the RSI is flatlining below its 50-neutral mark, while the MACD histogram is softening beneath zero and its red signal line.
If negative tendencies persist, the pair could initially challenge its five-month low of 0.8659. A break below that zone would send the price towards levels not seen in months, where the October bottom of 0.8570 might provide downside protection. Further declines could then come to a halt at the December 2022 low of 0.8546.
To the upside, should the pair reverse higher, the previous support of 0.8720 might serve as resistance in the future. Conquering this barricade, the bulls could target the April high of 0.8874 before 0.8928 comes under examination. Even higher, the 2023 peak of 0.8978 may prove to be a tough obstacle for the price to overcome.
In brief, EURGBP is likely to come under more selling pressure as near-term risks remain tilted. Nevertheless, a potential upside correction should not be ruled out in the case that the pair fails to post a fresh lower low.
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