EURGBP fell sharply by 1% on Tuesday, hitting a one-week low of 0.7026 as it dropped below the 50-day moving average. Today’s losses have taken prices further below the moving averages and the Ichimoku cloud, deepening the bearish outlook in the medium term.
The only positive signal is coming from the tenkan-sen and kijun-sen lines, with the tenkan-sen line just having crossed above the kijun-sen line. But this is likely to reverse in the coming days as RSI has dipped below 50 and the stochastics are heading down.
Support is likely to come from the July 17 low of 0.6936. A break below this level would strengthen the bearish momentum and steepen the downward trend. On the upside, resistance would come at the 50-day moving average at 0.7096. A break above this level is needed to weaken the bearish momentum. But EURGBP would need to rise above the 100-day moving average at 0.7165 to take the pair back into a range.
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