- EUR/GBP prints three-day losing streak, justifies downside break of 0.8770-75 confluence.
- Bearish MACD signals add strength to downside bias.
- Recovery moves need validation from 0.8815 to convince bulls.
EUR/GBP justifies the downside break of the previous key support confluence as it portrays a three-day downtrend near 0.8760 heading into Friday’s London open. In doing so, the cross-currency pair remains depressed around the Year-To-Date (YTD) lows marked earlier in the week.
A daily closing below the 0.8775-70 support-turned-resistance confluence, comprising the 100-DMA and an upward-sloping trend line from late December 2022 keeps EUR/GBP bears hopeful. Adding strength to the downside bias are the bearish MACD signals and lower high formation since March 08.
That said, the 61.8% Fibonacci retracement level of the pair’s upside from the last December to February, around 0.8710, seems to lure the EUR/GBP bears of late.
Following that, the December 20, 2022’s low near 0.8690 and the 200-DMA level surrounding 0.8685 could act as the key downside support to challenge the EUR/GBP bears, a break of which could quickly drag prices towards the late 2022 trough of near 0.8550.
Alternatively, recovery moves need to provide successful trading above the 0.8770-75 resistance confluence, previous support, to tease the EUR/GBP buyers.
Even so, a one-week-old descending resistance line, around 0.8815, precedes a three-week-old horizontal resistance, near 0.8835, to challenge the EUR/GBP buyers.
To sum up, EUR/GBP is likely to extend the latest south-run towards refreshing the YTD lows.
EUR/GBP: Daily chart
Trend: Further downside expected