The EUR/GBP pair has been trading below a multi-month range that it broke out of on May 22. Despite a recent retest, the pair failed to break back inside the range, indicating a potential for further downside movement.
After reaching a low of 0.8484 on May 29, EUR/GBP pulled back and retested the base of the range on May 31. However, this retest was unsuccessful, leading to a continued downward trend in the pair.
Typically, when prices break out below ranges, they tend to fall to a target that is at least a 0.618 Fibonacci ratio of the height of the range. In this case, the target for EUR/GBP is between 0.8484 and 0.8479, with the price just touching the top of this target zone during the May 29 sell-off.
A further break below the May 29 low of 0.8484 would confirm additional weakness, potentially leading to a target around 0.8452, which represents the full height of the range extrapolated lower. On the other hand, a break above the May 31 high at 0.8541 could cast doubt on the bearish bias.
Overall, the EUR/GBP pair is currently facing the risk of more downside movement, with key levels to watch for potential shifts in the trend.