Technical Analysis – EURGBP trades sideways but the bears still eye a new 2023 low
August 22, 2023 10:25 am
EURGBP is trading sideways today, not far from the recent July 11, 2023 low of 0.8503. The bears are actually trying to take advantage of the head-and-shoulders pattern and achieve at least a drop towards the 0.8500 area, with the full-height pattern target being in the 0.8400 region.
The momentum indicators appear to be fully supportive of the bears’ intentions. The Average Directional Movement Index (ADX) has risen above its 25-threshold, signaling a decent bearish trend in the market, and the RSI seems ready to record a lower low, confirming the current bearish tendency. The stochastic oscillator is once again trickier. It is hovering at its oversold territory and still holding a good gap from its moving average.
Should the bears still feel confident, they would try to finally break the 0.8503 level and be able to achieve a new 2023 low. The path then appears to be clear until the June 22, 2009 low at 0.8401, which coincides with the full-height target of the developing head-and-shoulders pattern.
On the other hand, should the bulls ignore the bearish signals, they would attempt to push EURGBP back above the 0.8581 level. If successful, they could have a go at breaking the much busier 0.8635-0.8650 area, which is populated by the February 10, 2009 high, 100-day simple moving average (SMA) and the key February 3, 2023 downward sloping trendline. Higher, the bulls could have the chance of retesting the busy 0.8668-0.8720 range, a key area for short-term sentiment.
To sum up, EURGBP bears are trying to retest the 2023 low. However, the bulls appear extremely worried that a break below the 0.8503 level could open the door to a more protracted bearish move.
EURGBP is trading sideways today, not far from the recent July 11, 2023 low of 0.8503. The bears are actually trying to take advantage of the head-and-shoulders pattern and achieve at least a drop towards the 0.8500 area, with the full-height pattern target being in the 0.8400 region.
The momentum indicators appear to be fully supportive of the bears’ intentions. The Average Directional Movement Index (ADX) has risen above its 25-threshold, signaling a decent bearish trend in the market, and the RSI seems ready to record a lower low, confirming the current bearish tendency. The stochastic oscillator is once again trickier. It is hovering at its oversold territory and still holding a good gap from its moving average.
Should the bears still feel confident, they would try to finally break the 0.8503 level and be able to achieve a new 2023 low. The path then appears to be clear until the June 22, 2009 low at 0.8401, which coincides with the full-height target of the developing head-and-shoulders pattern.
On the other hand, should the bulls ignore the bearish signals, they would attempt to push EURGBP back above the 0.8581 level. If successful, they could have a go at breaking the much busier 0.8635-0.8650 area, which is populated by the February 10, 2009 high, 100-day simple moving average (SMA) and the key February 3, 2023 downward sloping trendline. Higher, the bulls could have the chance of retesting the busy 0.8668-0.8720 range, a key area for short-term sentiment.
To sum up, EURGBP bears are trying to retest the 2023 low. However, the bulls appear extremely worried that a break below the 0.8503 level could open the door to a more protracted bearish move.
Related Posts: