The crossover in the 4-hour chart opens the door for a test of the yearly low

• EUR / GBP lost 0.05% during the American session.
• A mixed market mood causes the pair to swing between winning and losing.
• EUR / GBP Price Forecast: The crossover on the 4-hour chart paves the way for further losses.

The EUR/GBP It extends its losses on Monday, trading at 0.8423 during the American session at the time of writing. Market sentiment is mixed as US stock indices fluctuate between winners and losers, although the S&P 500 hit an all-time high at 4,807, the Nasdaq is down nearly 1% at press time.

The Covid-19 outbreak continues. On Tuesday, cases around the world hit a new daily high above 1.449 million cases amid the spread of the newly discovered strain called Omicron.

In the overnight session, the EUR / GBP remained subdued in the Asian session. But as European traders came to their desks, risk appetite weighed on the shared currency, which has been a safe-haven game of late, dipping as low as 0.8400, then reversing its curse, stabilizing around the daily low. from December 27 at 0.8422. .

EUR / GBP Price Forecast: Technical Outlook

The 4-hour EUR / GBP chart shows the formation of a descending wedge, but at the same time, the 50 Simple Moving Average (SMA) crossed below the 200 SMA, forming a death cross, a bearish sign. Also, the Relative Strength Index (RSI), an indicator of momentum at 38.21 despite pointing up, remains in bearish territory, so there is a move lower in the charts.

On the way down, the first support for EUR / GBP would be the psychological 0.8400 level. A break below the latter would expose the yearly low at 0.8380.

To the upside, the first resistance of the EUR / GBP would be the daily high of December 28 at 0.8430. A breakout of that level would open the door to further gains. The next line of defense for GBP bulls would be the December 24 daily high at 0.8463, followed by the December 23 daily high at 0.8497.

Technical levels