EURGBP trades to lowest level since May 2020

Technical Analysis

Author: Greg Michalowski | eurgbp

Run higher in GBPUSD and run lower in EURUSD sends the EURGBP down

The EURGBP is one of the biggest mover's today as bearishness in the EURUSD sends that pair lower, while the GBPUSD as moved higher after the BOE turn its back on negative rates. 

Run higher in GBPUSD and run lower in EURUSD sends the EURGBP down 
The moved to the downside has taken the price to the lowest level since May 12. Looking at the daily chart, the pairs low has also tested the underside of a broken trend line at 0.87466. The low price today reached the 0.87505. Buyers may be leaning. Staying on the daily chart, a move lower would next target the 61.8% retracement of the range since December 2019. That level comes in at 0.87326.

Last Thursday, the price high stalled near the 50% retracement at 0.88788 and started the push lower and away from that midpoint and swing area (see green numbered circles and yellow area). Going forward, staying below the swing area keeps the bears more in control from the daily chart perspective. 

Drilling to the hourly chart, at the highs today, the price tested its  200 hour moving average (green line in the chart below), but found sellers leaning against the level. Those traders were rewarded after the Bank of England decision with the tumbled lower. The close today did crack below a lower channel trendline, but quickly reversed. That trend line has reestablished as support currently at 0.8756. It would take a move below that level to solicit more selling from a technical perspective on this chart. On the topside the 0.87948 low from Tuesday is now resistance. That level is also the midpoint of today's trading range.

EURGBP on the hourly chart

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