EUR/GBP has fallen to a critical support level and is currently consolidating. The pair is in a short and medium-term downtrend, but there are some bullish signs that could potentially lead to a reversal.
EUR/GBP Daily Chart
The June 14 low at 0.8398 is acting as a strong support level for EUR/GBP. If the pair manages to bounce off this level, we could see a reversal and a move higher. However, there are only tentative signs of this happening, as price continues to fall.
Despite the bearish trend, there are some positive indicators. A bullish Japanese Hammer candlestick pattern formed on July 17, followed by a green up day, confirming the bullish signal. Additionally, the RSI is converging bullishly between the June 14 and July 17 lows, indicating a potential lack of bearish momentum.
However, the overall trend is still bearish, suggesting that downside pressure is likely to persist. A break below the Hammer candlestick low at 0.8383 could lead to further weakness, with a target at 0.8350. On the other hand, a break above 0.8499 would indicate a more bullish outlook for the pair.
In conclusion, EUR/GBP is currently at a critical juncture, with the support level holding the key to a potential reversal. Traders should monitor the price action closely to determine the next move in this currency pair.