EURGBP moves down toward a key 100/200 day MA test

The EURGBP EUR/GBP The EUR/GBP is the currency pair encompassing the European Union’s single currency, the euro (symbol €, code EUR), and the British pound of the United Kingdom (symbol £, code GBP). The pair’s rate indicates how many British pounds are needed in order to purchase one euro. For example, when the EUR/GBP is trading at 0.7500, it means 1 euro is equivalent to 0.75 British pounds. The euro is the world’s second most traded currency, whilst the British Pound (GBP) is the world’s third most traded cur The EUR/GBP is the currency pair encompassing the European Union’s single currency, the euro (symbol €, code EUR), and the British pound of the United Kingdom (symbol £, code GBP). The pair’s rate indicates how many British pounds are needed in order to purchase one euro. For example, when the EUR/GBP is trading at 0.7500, it means 1 euro is equivalent to 0.75 British pounds. The euro is the world’s second most traded currency, whilst the British Pound (GBP) is the world’s third most traded cur Read this Term is lower for the 4th consecutive day and 6 the last 7 trading days. Today is the biggest move with the pair down -0.96%.

Looking at the daily chart, the price low just reached 0.8455. The move lower has seen the price move below the 50% retracement of the move up from the March low. That level comes in at 0.84613.

The price is also moving closer to the near converged 100 and 200 day moving averages which are around the 0.8445 level. A move below those levels would increase the bearish bias (100 is at 0l.84458 while the 200 day MA is at 0.84422). Be aware.

I would expect buyers against the dual daily MAs as risk can be defined and limited against the levels. However, on a break it should trigger stops and the bias turns more bearish.

Drilling to the hourly chart, the high prices this week on Monday and Tuesday saw the price move briefly above their 100 hour moving average (blue line in the chart below). Also on Tuesday, a quick corrective move to the upside stalled against both the 200 and 100 hour moving averages. Yesterday, the high price also fell short of the lower 100 hour moving average.

That gave the sellers the go ahead 2 push to the downside. Today's buying of the GBP after the resignation of Boris Johnson has helped to extend the declines toward the aforementioned 100 and 200 day moving averages. In the process, the pair fell below a swing area between 0.8481 and 0.84946. It would take a move back above that area to give the dip buyers against the daily moving averages some comfort that the declines may be over for now.

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