- EUR/GBP extends the previous day’s corrective pullback ahead of BOE.
- Bearish MACD signals, failure to cross support-turned-resistance keep sellers hopeful.
- Previous support line from March, 61.8% Fibonacci retracement guards immediate recovery ahead of 200-DMA.
- Late March swing low could lure the bears below 0.8340.
EUR/GBP picks up bids to 0.8310 as buyers mark another attempt to cross the previous support line from March during early Thursday morning in Europe. That said, the cross-currency pair dropped to the lowest levels since April 22 on Tuesday before bouncing off 0.8340.
The pair’s latest recovery, however, takes clues from the nearly oversold RSI conditions. Even so, the quote remains below the support-turned-resistance line surrounding 0.8380. Also challenging the short-term EUR/GBP buyers is the weekly resistance line, near 0.8385.
Even if the pair rises past 0.8385, the 61.8% Fibonacci retracement of the March-June upside and the 200-DMA level, respectively near 0.8400 and 0.8440, could challenge the EUR/GBP bulls.
Following that, the ball lands in the buyer’s court and the prices could rise towards late July’s swing high close to 0.8585.
On the flip side, the latest bottom near 0.8340 restricts the immediate downside of the EUR/GBP prices during the fresh pullback. Following that, a south-run towards the March 23 low of 0.8295 appears logical.
In a case where EUR/GBP remains bearish past 0.8295, the odds of witnessing a further south-run towards the yearly low marked in March, near 0.8200, can’t be ruled out.
EUR/GBP: Daily chart
Trend: Further weakness expected