Expert FX strategists at Société Generale have observed that the decline of EUR/GBP has come to a temporary halt after reaching an interim trough near 0.8400.
Potential Fall Towards 0.8350/0.8340
According to the strategists, the daily MACD indicator is showing positive divergence, indicating a decrease in downward momentum. However, they caution that there are currently no clear signals of a significant rebound. The first level of resistance lies at the 50-day moving average near 0.8465, which needs to be surpassed to confirm a larger bounce. Failure to do so could signal a risk of a deeper pullback.
If the support level at 0.8400 is broken, it could lead to the next leg of downward movement towards 0.8380 and potentially even lower to the next targets at 0.8350/0.8340.
Analysis and Implications for Investors
For investors in the EUR/GBP currency pair, the current situation presents both risks and opportunities. The positive divergence on the daily MACD suggests a possible reversal in the downward trend, but confirmation is needed through a break above the 50-day moving average.
Traders should monitor the key support level at 0.8400 closely, as a breach could lead to further declines towards 0.8350/0.8340. On the other hand, a successful break above 0.8465 could signal a potential rebound in the pair.
Overall, investors should remain vigilant and consider their risk tolerance when making trading decisions in the EUR/GBP market.