The EURGBP on the 4-hour chart is testing a dual technical support level defined by the rising 100 bar moving average (blue line) and the 50% midpoint of the move up from the pre-ECB low last Thursday. Those levels come in at 0.83769 and 0.83805 respectively. The low price just reached 0.83794.
A move below those levels would tilt the bias more in the sellers/bearish direction with the 200 bar moving average at 0.8369 being a confirming target. Break below that level and sellers are more firmly in control.
Hold the level, and traders will look for a bounce back toward the 38.2% retracement at 0.84034. Getting above that level would be needed to give the dip buyers more comfort.
Recall from last week, the price of the EURGBP fell below a lower swing area/floor between 0.83048 and 0.8314 ahead of the ECB meeting and press conference. The more hawkish tilt from ECB's Lagarde (did not rule out tightening in 2022) sent the pair trending to the upside. On Friday, the price moved above its 100 day moving average at 0.84487 currently (upper blue line). On Monday, the price traded above and below that moving average level as buyers and sellers battled.
Sellers won the battle as the price started to push more to the downside.
On Tuesday and Wednesday price fell toward swing low support near 0.8412. The rebound on Wednesday stalled against its 100 day moving average and that was the go-ahead technically for sellers to start the next run to the downside.
Now with the price testing the dual technical support level there is a cause for pause. Decision time for traders.
