EUR/GBP continues its downward trend within a falling channel, reaching oversold levels that may signal a potential rebound. The pair’s short-term downtrend suggests further weakness, but there are indications of a possible turnaround.
Currently, EUR/GBP has hit the lower channel line, a historical support level that has previously led to upward reversals. The Relative Strength Index (RSI) is in oversold territory, hinting at a potential recovery. Traders should be cautious about adding to short positions and wait for RSI to exit oversold levels before considering buying opportunities.
On the technical side, EUR/GBP has broken below the 200-period Simple Moving Average (SMA) and the 0.618 Fibonacci retracement level, indicating bearish momentum. However, a bullish Hammer candlestick pattern on August 23 suggests a possible near-term rebound, with the key support level at 0.8453.
While a decisive break below the channel line could lead to further downside, it may also signal exhaustion in the current trend. Traders should monitor for confirmation of a breakout, such as a longer-than-average red candlestick closing below the channel line.
Overall, the short-term trend is bearish, but the medium-term trend remains bullish. It is important to stay vigilant and wait for clear signals before making any trading decisions.
Analysis: EUR/GBP is in a short-term downtrend but shows signs of a potential recovery. Traders should watch for RSI exit from oversold levels and monitor key support levels for confirmation of a turnaround. The medium-term trend remains bullish, providing hope for a possible rebound in the near future.