- EUR/GBP encounters resistance, lingering below the pivotal 200-DMA of 0.8700, spotlighting downside risks.
- A breach below 0.8605 could unlock further descent, targeting September lows and potentially the YTD low.
- Recovery above 0.8658 may pave the way for a test of the crucial 0.8700 psychological and technical barrier.
The EUR/GBP extended its losses to five straight trading days and hovers at around the September 28 swing low of 0.8629, amidst a risk-off impulse courtesy of the escalation of the fight between Hamas and Israel, set to extend for the fourth straight day. Therefore, the EUR/GBP edges lower by 0.05%, and exchanges hands at around 0.8635.
The daily chart portrays the pair as neutral biased, but it appears to have bottomed, as shown by price action; nevertheless, as EUR/GBP’s price action remains trading below the 200-day moving average (DMA) of 0.8700, downside risks remain. For a bearish continuation, sellers mist break below the 50-DMA at 0.8605. A breach of the latter and the 0.8600 figure would expose the September 15 daily low of 0.8569, followed by the September 5 low of 0.8523. Once those levels are cleared, up next would be the year-to-date (YTD) low of 0.8492.
Conversely, If EUR/GBP buyers reclaim the October 9 daily high at 0.8658, that would open the door to test the confluence of the figure and the 200-DMA at 0.8700. A decisive break would expose the May 3 high at 0.8834.
EUR/GBP Price Action – Daily chart
EUR/GBP Key Technicals