Weakness expected under 0.8480 level: EUR/GBP technical analysis
EUR/GBP technical analysis highlights that the bearish trend underway in the pair is likely to gain momentum while price trades below the 0.8480 level. Further weakness towards the 0.8000 level remains highly possible.
The EUR/GBP pair has staged a minor technical bounce, after finding interim support from the 0.8280 level.
EUR/GBP technical analysis shows that the pair is likely to remain a strong sell on any rallies, while trading below the 0.8480 level.
EUR/GBP medium-term price trend
The euro currency has managed to stage a marginal recovery against the British pound, after slumping towards the 0.8280 level.
Weakness in the British pound currency has largely provoked the recovery, rather than any meaningful technical or fundamental factors.
EUR/GBP analysis shows that the pair has the potential to fall towards the 0.8000 and possibly the 0.7850 level, while trading beneath the 0.8480 level.
The daily time frame shows that a large head-and-shoulders pattern has recently been triggered, with over 800 points of downside potential.
Traders should expect more weakness in the pair over the medium-term towards the mentioned targets while price trades below neckline resistance, at 0.8480.
EUR/GBP short-term price trend
EUR/GBP technical analysis shows that the pair has staged a technical bounce, after a bullish reversal pattern was ignited.
The size of the bullish inverted head-and-shoulders pattern suggests that an upcoming short-term rally towards the 0.8440 technical area may take place.
Traders are expected to sell any corrective moves back the 0.8440 level before the next major down move occurs.
It is also noteworthy that bullish MACD price divergence is also present on the lower time frames and extends towards the mentioned upside, around the 0.8440 level.
EUR/GBP technical summary
EUR/GBP analysis indicates that a corrective rally towards the 0.8440 level is likely to take place over the near-term. Traders may use this as a major selling opportunity, in anticipation of more medium-term weakness.