Last week on Friday, EURGBP managed to break the short-term upwards moving trendline, taken from the low of the 15th of June. This could be a good indication that the Euro is losing its ground against the British Pound. Certainly, there is a strong chance that the pair could retrace back up a little, but the upside still could be limited due to the short-term downside resistance line, drawn from the peak of the 28th of August.
If the abovementioned upwards moving trendline holds and doesn’t allow EUR/GBP to move higher, this could be a good opportunity for the bears to take advantage of the higher rate and take it lower again. This could lead to a test of the 0.8912 zone, marked by the low of last week, which acted as good area for a small bounce. A break below 0.8912 could open the way towards the 0.8895 hurdle, which if broken, could set the stage for some further declines to the 0.8855 barrier, marked by the August low.
For us to start examining the upside again in the near-term, we would need to see a clear break and a close above the 0.9005 level, which would also place EUR/GBP above the aforementioned short-term downside resistance line. Only then we could start aiming for the recent highs that we saw in the end of August and the beginning of September. The next potential resistance area to watch would could be the high of the 5th of September at around 0.9052. A break of it could open the path towards the 0.9100 zone, which was near the peak of the 28th of August.
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