XM does not provide services to residents of the United States of America.

XM does not provide services to residents of the United States of America.
XM ResearchNeutral

Technical Analysis – EURGBP tests a key support area

- Achilleas Georgolopoulos

  • EURGBP edges higher today ahead of crucial ECB meeting

  • Strong downside pressure in place despite UK elections being in the spotlight

  • Momentum indicators are mostly mixed at this juncture

EURGBP is trading higher today, a tad above its lowest level since August 2022, and in an extremely important support area that has repeatedly acted as a floor and put a stop in the bears’ momentum. The market is preparing for the much-awaited ECB meeting that could deliver the first rate from a major central bank later today. The euro has been under severe pressure since mid-April with a slightly odd-shaped double-top structure playing a key role in the current downward trend.

In the meantime, the momentum indicators appear mixed. The Average Directional Movement Index (ADX) remains above its 25-threshold, but it is trading sideways and thus pointing to a weakening bearish trend in EURGBP. Similarly, the RSI is stuck below its 50-midpoint. More importantly, the stochastic oscillator is trying to climb above both its moving average and oversold territory. Should this move take place, it would be seen as a strong bullish signal.

Should the bulls retake control, they could first try to lead EURGBP above the busy 0.8492-0.8504 area, which is defined by the February 24, 2012 high and the August 23, 2023 low. Even higher, the 50- and 100-day simple moving averages (SMAs) at the 0.8550-0.8554 range could prove strong resistance points, with the more important 200-day SMA currently standing a tad higher.

On the flip side, the bears appear determined to keep EURGBP below the 0.8492-0.8504 area and then retest the recent trough at 0.8483. If successful, they could then push EURGBP much lower with the August 4, 2022 low at 0.8339 possibly being the next target.

To sum up, EURGBP remains on the back foot ahead of the ECB with the bears once again trying to decisively break through the strong 0.8492-0.8504 support area. 

Related Assets

Latest News

View All
XM Research - 41 minutes agoBearish

Technical Analysis – GBPUSD remains bearish in very short-term

G
XM Research - 16 hours ago

Technical Analysis – US 500 index charts a double top pattern

U
XM Research - 19 hours agoBullish

E
XM Research - 22 hours agoNeutral

Technical Analysis – EURUSD gaps higher over potential French hung parliament

E
XM Research - 22 hours ago

Weekly Technical Outlook – EURGBP, USDJPY, USDCAD

U
U
E

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.