EUR/GBP traded south on Wednesday, falling below yesterday’s low of 0.9057. There is no clear trending structure on the 4-hour chart, and thus we will stay neutral with regards to the broader near-term outlook. However, given that there is decent distance between the current price and the next support level, we would see decent chances for some further declines at least towards that level, which is at 0.8981 and is marked by the lows of December 4th, 9th, and 17th.
If the bears don’t stop there, the next support to consider may be the low of December 24th, at 0.8953, the break of which may pave the way towards the low of December 1st, at 0.8928. If the latter barrier is not able to halt the slide either, then we may experience bearish extensions towards the 0.8866 territory, which is marked as a support by the low of November 23rd.
The RSI turned down and fell below its 50 line, while the MACD has also turned south, falling below both its zero and trigger lines. Both indicators suggest that this exchange rate may have started gathering downside speed, which supports the notion for some further short-term declines, at least towards the key support zone of 0.8981.
In order to start examining the upside again, we would like to see a rebound back above yesterday’s high, which is at 0.9093. Such a move would confirm a forthcoming higher high on the 4-hour chart and may see scope for advances towards the peak of December 22nd, at 0.9156. Another move higher, above 0.9156, may encourage the bulls to put the 0.9217 territory on their radars. That zone is marked as a resistance by the high of December 21st.
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