EURGBP Forecast – Bears Testing Key Supports

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In today’s EURGBP forecast, we examine the pair’s recent price action using the 4-hour chart. First, let’s review the recent updates on the United Kingdom’s economy.

UK Stock Market: Mild Decline in FTSE 100 Index

Bloomberg—On Monday, the FTSE 100 index experienced a small dip at the start of the week, falling just below the 7,475 level. This slight decrease continues the trend from the previous week. Traders displayed caution, holding back from making significant investments. This restraint is mainly due to anticipating important economic updates expected during the week, such as new inflation figures from the United States and manufacturing data from China. These releases are particularly influential for the resource-heavy London stock market.

Commodity companies witnessed a downturn, influenced by minor crude oil and copper price decreases. Oil giants Shell and BP saw their shares fall by around 1%. Similarly, mining companies like Rio Tinto, Antofagasta, and Glencore each saw a retreat of about 0.5%.

Contrasting with the general market trend, pharmaceutical company GSK experienced a slight increase in its share price. This positive shift followed the announcement of successful phase-3 results for its blood cancer medication.

EURGBP Forecast – Bears Testing Key Supports

During Friday’s trading session, the EURGBP bears broke below the bullish channel, intensifying the downward pressure. Currently, the pair is testing the 0.8674 support level. Concurrently, the Relative Strength Index (RSI) indicates oversold conditions, and the Awesome Oscillator’s histogram has turned green.

EURGBP Forecast - Bears Testing Key Supports

EURGBP Forecast – Bears Testing Key Supports – 4H Chart

However, the overall market sentiment remains bearish for the EURGBP pair as long as it stays below the 0.86941 support level. This level, aligning with the previously broken bullish trend line, supports the notion that the pair may continue to decline, potentially targeting the 0.8649 level next.

A shift in this bearish scenario would require the EURGBP bulls to regain control and stabilize the price above the 61.8% Fibonacci retracement level. Such a move would invalidate the current bearish outlook and could signal a change in the EURGBP pair’s direction.

  • 27 November 2023