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Bears flirt with descending triangle support, around 0.9000 level

  • EUR / GBP is witnessing some selling on Friday and falls to the 0.9000 support zone.
  • The formation of a descending triangle and bearish oscillators support the prospects for a further decline.

The EUR / GBP cross has struggled to capitalize on its positive intraday movement and has encountered further selling near resistance marked by a downtrend line of more than a week. The cross has now fallen back to important horizontal support near the key psychological level 0.9000.

The aforementioned horizontal support and trend line resistance constitute the formation of a descending triangle on short-term charts. A convincing breakout of the triangle support will be seen as a new trigger for the bears and will pave the way for a further decline in the short term.

Meanwhile, the technical indicators on the daily chart have remained in bearish territory and have again started to gain negative momentum on the 1 hour charts. The setup favors the bears and supports the prospects for an eventual breakout of the descending triangle.

The next relevant target on the downside is near the horizontal zone of 0.8970-65 ahead of the 0.8925-20 region and the round level of 0.8900. The bearish move could further extend towards the next major support near the 0.8875-65 region.

On the other hand, any significant recovery attempt could continue to face new resistance and remain limited near the trend line, around the 0.9055-60 region. That being said, a sustained move above this level will negate the bearish outlook and trigger some short-term hedging move.

The EUR / GBP cross could accelerate the recovery movement towards the 0.9100 level. Some subsequent purchases have the potential to lift the EUR / GBP cross towards the intermediate resistance at 0.9155-60 before the bulls finally aim to regain the round level of 0.9200.

EUR / GBP 1 hour chart

EURGBP

EUR / GBP technical levels

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Credits: Forex Street

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