- EURGBP faced rejection near the top end of one-month-old descending channel resistance.
- The set-up favours bearish trades and supports prospects for a slide to the 0.8965 support.
- Any meaningful positive move is more likely to remain capped near 0.9125 strong barrier.
In this week’s #ThrowbackThursday, we revisit our EURGBP bearish call initiated on October 1st. The cross did show some resilience below 100-day SMA and staged a goodish bounce during the first half of the week. The uptick, however, faced rejection near the top boundary of over one-month-old descending channel. The subsequent slide dragged the pair to the key 0.9000 psychological mark, or the lowest level since September 8.
Meanwhile, technical indicators on the daily chart have just started drifting into the bearish territory and support prospects for additional weakness. Hence, some follow-through downfall towards the trend-channel support, around the 0.8965 region, now looks a distinct possibility. A convincing break below will set the stage for an extension of the recent sharp pullback from the vicinity of the 0.9300 handle.
On the flip side, immediate resistance is pegged near the 0.9070-75 horizontal zone and is closely followed by the 0.9100 mark, above which the pair is likely to climb back to the channel resistance, currently near the 0.9125 region. Only a sustained move beyond will negate the bearish outlook and assist the pair to aim back towards reclaiming the 0.9200 handle.