- A combination of factors prompted some fresh selling around the EUR/GBP on Friday.
- The set-up favours bearish traders and supports prospects for a slide to the 0.9000 mark.
The EUR/GBP cross witnessed some aggressive selling during the early European session and slipped below mid-0.9000s, or four-day lows in the last hour. A goodish pickup in the demand for the British pound, combined with a softer tone surrounding the shared currency exerted some pressure on the cross.
Looking at the technical picture, the EUR/GBP cross has been trending lower along a downward sloping channel over the past three weeks or so. The set-up points to a well-established short-term bearish trend and supports prospects for an extension of the recent pullback from the 0.9300 neighbourhood.
The negative outlook is further reinforced by the fact that technical indicators on the daily chart have just started drifting into the negative territory. A subsequent break below the 0.9060 level might have already set the stage for a slide towards the key 0.9000 psychological mark.
On the flip side, any attempted positive move might now confront immediate resistance near the 0.9100 round-figure mark. Above the mentioned hurdle, the EUR/GBP cross is likely to aim back towards challenging the trend-channel barrier, around the 0.9155-60 region.
Only a convincing breakthrough the trend-channel will negate any near-term bearish bias and lift the EUR/GBP cross back towards the 0.9200 round-figure mark. The momentum could get extended towards the 0.9255-60 horizontal resistance en-route September monthly swing highs, around the 0.9290 area.
EUR/GBP 1-hourly chart
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Technical levels to watch
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