Intraday decline stalls near 50% Fibonacci level

• The EUR / GBP coupled with its strong intraday losses moved further away from the multi-month highs on Friday.
• The intraday decline found some support near the 50% Fibonacci amid the oversold RSI on the 1 hour chart.
• The setup still seems skewed in favor of the bulls and warrants caution before placing further bearish bets.

The crossing EUR/GBP it maintained its strongly offered tone during the middle of the European session and updated the daily lows, around the 0.9045 region in the last hour. The drop dragged the cross further from the nearly three-month high, around the 0.9230 region touched on Friday.

However, the slightly oversold RSI on the 1 hour charts helped the cross to find some support near the 50% Fibonacci level of the recent strong upward move from 0.8867-0.9230. This is followed by a multi-week rising trend line support near the 0.9030-25 region, which if broken will set the stage for further weakness.

Meanwhile, the technical indicators on the 4-hour chart have only just started to gain negative traction. However, the oscillators on the daily chart, although they have been losing positive momentum, are still in bullish territory and support the prospects for some falling buying to emerge at lower levels.

This warrants some caution for aggressive bearish traders. Therefore, it is prudent to wait for a strong follow-up sell below the mentioned trend line support before confirming that the EUR / GBP cross has peaked in the short term and positioning for any further depreciation moves below. from the key psychological mark of 0.9000.

The latter coincides with the 61.8% Fibonacci level, below which the EUR / GBP cross seems ready to accelerate the decline towards the 0.8950-45 horizontal support. The downward trajectory could extend further and has the potential to drag the cross down below 0.8900 in the near term.

On the other hand, any attempt to move upwards could now face immediate resistance near 0.9100 (38.2% Fibonacci level) before the daily swing highs, around the 0.9120 region. A sustained move further could negate the bearish bias and help the EUR / GBP point back to regain the 0.9200 level.

1 hour chart

Technical levels