- EUR/GBP retreats after stopping two-day uptrend, sidelined of late.
- Bearish candlestick formation below the key trend line and DMA challenge further upside.
- 100-DMA tests sellers ahead of six-week-old support line.
EUR/GBP steadies around 0.8580 after stepping back from a two-week top the previous day.
In doing so, the cross-currency pair justifies Wednesday’s ‘Hanging man’ bearish candlestick formation while easing below the downward sloping resistance line from July 20 and 200-DMA.
Given the firmer Momentum line, as well as an upside break of 100-DMA, EUR/GBP is likely to keep the latest pullback moves between the stated resistance line and 100-day moving average, respectively around 0.8595 and 0.8570.
Should the quote drop below 0.8570, an ascending trend line from August 10 will question the bears around 0.8510 before directing them to the monthly low of 0.8500.
Meanwhile, an upside clearance of the stated resistance line needs to refresh the monthly top, currently at 0.8613, before heading towards the 200-DMA level near 0.8660. Also acting as an upside filter is July’s peak surrounding 0.8670.
EUR/GBP: Daily chart
Trend: Further weakness expected
