EURGBP dips below the 200 hour MA and sees some additional selling on the break

The EURGBP EUR/GBP The EUR/GBP is the currency pair encompassing the European Union’s single currency, the euro (symbol €, code EUR), and the British pound of the United Kingdom (symbol £, code GBP). The pair’s rate indicates how many British pounds are needed in order to purchase one euro. For example, when the EUR/GBP is trading at 0.7500, it means 1 euro is equivalent to 0.75 British pounds. The euro is the world’s second most traded currency, whilst the British Pound (GBP) is the world’s third most traded cur The EUR/GBP is the currency pair encompassing the European Union’s single currency, the euro (symbol €, code EUR), and the British pound of the United Kingdom (symbol £, code GBP). The pair’s rate indicates how many British pounds are needed in order to purchase one euro. For example, when the EUR/GBP is trading at 0.7500, it means 1 euro is equivalent to 0.75 British pounds. The euro is the world’s second most traded currency, whilst the British Pound (GBP) is the world’s third most traded cur Read this Term is seeing a break below the 200 hour MA a 0.86536 and it has led to some additional selling momentum. The level is now a risk level for the sellers.

Looking at the hourly chart, the price has been trending to the upside since breaking above converged 100/200 hour MAs back on August 26 (at 0.8442). The price initially peaked on September 2 and retraced toward the lagging 100 and 200 hour MAs. The 100 hour MA was broken but traders leaned near the 200 hour MA, and the rally resumed.

That rally stalled on Monday at 0.87218. The price moved back down to test the 200 hour MA yesterday, and bounced modestly. Today, that 200 hour MA was finally broken over the last few hours. Buyers turned to sellers on the break.

What next for the EURGBP?

The 200 hour MA is now a close risk level. After holding that MA (green line) on a number of dips, breaking below today is a shift in the bias to the downside that should be respected. Having said that the breaks of the MAs (both the 100 and 200 hour MA) are step 1. There is more work to do to give the sellers more control.

On the downside the next focus on the hourly chart above comes in at 0.8603 to 0.86085 (see red numbered circles). Just below that area is the 38.2% of the move up from the August 17 low. That low was where the price based before starting the last trend leg higher. Getting below the 38.2% of a trend move is the minimum retracement target IF the sellers are to take more control.

Taking a broader look at the daily chart below the recent high stall takes on added importance. Looking at the chart below, the move to the downside got a push from the pair stalling at the June 2022 high at 0.87205. That level was also close to the 50% of the move down from the December 2020 high at 0.87155 and prior swing levels up to 0.8730 (see red numbered circles and yellow area). The high was a good level to stall. That stall started the wander back to the downside.

Going forward, if the buyers do regroup and take the price back above the 200 hour MA and 100 hour MA, getting above the daily levels would be eyed for more upside potential.