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EUR/GBP at the Cusp of Bearish Continuation

Bearish Trend: When you look at the daily EUR/GBP chart, you can see a market that has turned sideways after a bearish trend from at least the 0.84 high on the year down to 0.7875 low on the year from March to July. Since the low on the year, price has rallied to 0.8033, where traders respected the a June consolidation high as resistance. The daily RSI was also held below 60. This shows that the bears are still in control of this market. Price is now about to cross back below the 50-day SMA, which would renew the bearish bias based on price-moving average dynamics.

(EUR/GBP Daily Chart 8/25)

Bearish Continuation Pending: So, the daily chart shows one more step can be taken to prove the market is indeed in bearish continuation. The 4H chart also shows that the pair is at the cusp of returning to the bearish scenario.

We can see that if price breaks below 0.7940, it will clear below a rising trendline, and the 200-period SMA in the 4H chart. There is also a support/resistance pivot at 0.7940. The RSI would likely be dragged below 30 in this scenario, which might indicate oversold condition in the near-term, but would mainly be an indication that there is strong bearish momentum developing.

Resistance for pullback: If there is a pullback, a bearish market should not let price climb above 0.80. You can see a resistance area between 0.7985 and 0.7997. There should be sellers in this area if not lower.

(EUR/GBP 4HChart 8/25)