EUR/GBP Market Update

On Friday, the EUR/GBP currency pair saw a slight increase, marking its second consecutive day of gains as traders began to unwind short positions that had built up following a downturn earlier in the week. Currently, the cross is trading around 0.8501, but notably, it remains in a decline that has lasted four weeks.

From a technical standpoint, EUR/GBP is experiencing consistent downward pressure after dropping below significant support at 0.8600 on July 1, leading to a one-year low for the pair.

The daily chart shows the cross hovering near 0.8504, falling below the 50-day, 100-day, and 200-day simple moving averages, which range between 0.8617 and 0.8688. This suggests ongoing weakness.

The Relative Strength Index (RSI) is currently positioned below 33, just above the oversold level of 30, while the Average Direction Index (ADX) stands at 31, indicating a robust downtrend.

As for resistance levels, the initial one appears at 0.8550, closely followed by another at 0.8600. If the pair attempts to recover, the 50-day SMA at 0.8617 and the 100-day SMA at 0.8645 might serve as obstacles, while the 200-day SMA set at 0.8688 presents a stronger barrier.

On the flip side, the next key support is seen at 0.8450. If the price breaks below this level, it could usher in further declines in the ongoing bear market.