EUR/GBP Price Forecast: Falls back to the bottom of the range

• EUR/GBP has sold back to the lows of its short-term range.
• It is probably in a sideways trend and is likely to find stubborn support at the lows of the range.

EUR/GBP declines to the base of its six-week range (red dashed line on chart) at around 0.8311; it is likely to find firm support at that level.

EUR/GBP 4-hour chart

The pair is likely in a short-term sideways trend and given the technical analysis principle that “the trend is your friend”, the odds favor an extension of this range-bound price action.

Therefore, if EUR/GBP stops selling at the bottom of the range and starts bouncing higher, it would confirm that the sideways trend was extending. That said, the price has not yet stopped its decline, is still pushing down and shows no signs of a rebound.

If the bearish behavior continues and EUR/GBP decisively breaks below the 0.8311 floor, it would suggest that the medium and long-term bearish trends were reaffirming, and the pair would likely fall further. However, it should be noted that these levels represent more than two-year lows for the pair.

However, a clear break below them, by a longer than usual daily candle below the 0.8311 lows, or perhaps by three consecutive red candles, would confirm a decisive breakout. Such a move would likely lead to a sell-off until around the 0.8240 level, this being the 61.8% Fibonacci extension of the range height extrapolated downwards.