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EUR/GBP holds near 0.8550 as risk mood stays subdued
The cross is down for a third straight day and trades near the August 19 low, with a potential break below 0.8550 turning the setup bearish.
EUR/GBP extended losses into Monday for a third consecutive session, trading around 0.8555, about 0.3% below last week’s highs, as investors kept a moderate risk-off stance amid growing US-Iran tensions. FXStreet also pointed to a thin Monday data calendar, after Friday’s releases showed stronger economic activity in both the UK and the eurozone, while UK retail sales disappointed in July.
The technical picture remains range bound, with the immediate bias turning bearish. FXStreet cited a 14-period RSI drifting toward the mid-40s and a slightly negative MACD on the four-hour chart, signaling waning upside momentum while keeping price action contained.
Support is centered on the 0.8550 area around the August 19 low, with further downside flagged if the 0.8530 region is breached. FXStreet said that a drop below the July 24 and August 12 lows near 0.8530 would confirm a Double Top pattern, pointing to a measured target near 0.8483.
On the upside, resistance is seen first at Friday’s top around 0.8575, followed by the upper end of the recent range near 0.8585. FXStreet also noted ING’s view that in a low volatility environment, sterling may benefit from carry demand, helping it cope better than the euro during the current risk mood.