EUR/GBP is returning back inside a medium-term range after briefly moving above it. The pair is continuing its sideways trend and could potentially fall back towards the range lows. The MACD indicator has given a bearish signal by crossing below its signal line.
On May 7, EUR/GBP temporarily broke out of its multi-month range but has since moved back inside. This ongoing sideways trend is expected to persist, following the market adage “the trend is your friend.”
After breaking out above the range on May 7, EUR/GBP formed a multiple topping pattern and has now broken down through the neckline of the pattern. There is a possibility that the pair may fall back towards support at around 0.8540.
The MACD indicator’s sell signal on May 10 led to further downside movement for EUR/GBP. For a change in the sideways trend, the pair would need to decisively break below the range lows or above the April 23 high.
If EUR/GBP breaks below the range floor, it could target 0.8486 and potentially 0.8460. A decisive break would involve a strong bearish candlestick or a series of red candlesticks below the range floor. The weakened top of the range suggests it may not provide as strong support or resistance.
To confirm a new uptrend, EUR/GBP would need to break above the April 23 peak at 0.8645. Overall, the pair is currently within a range-bound movement, with key levels to watch for potential breakout or reversal.