EUR/GBP Technical: Short-term relative weakness of EUR reasserts against GBP

• Persistent underperformance of the EUR against GBP as the EUR/GBP cross pair reintegrated below the 200-day moving average.
• The hourly RSI momentum indicator of EUR/GBP has flashed out a bearish momentum condition.
• Watch the 0.8615 key short-term resistance with intermediate supports coming in at 0.8550 and 0.8500.

In the long term, the EUR/GBP cross pair is still evolving within a major downtrend phase as depicted by its price actions’ oscillations within a descending channel in place since the 3 February 2023 swing high of 0.8979 (see Fig 1)

 The major downtrend phase has remained intact since 3 February 2023

Fig 1:  EUR/GBP medium-term trend as of 9 Jan 2024 (Source: TradingView, click to enlarge chart)

Short-term downside momentum has resurfaced

Fig 2:  EUR/GBP minor short-term trend as of 9 Jan 2024 (Source: TradingView, click to enlarge chart)

Recent price actions have staged a bearish breakdown below its 200-day moving average at the start of 2024 on 3 January.

On the hourly chart, the price actions have taken the form of a minor descending channel with a bearish momentum reading seen in the hourly RSI momentum indicator as it staged a bearish reaction right below its parallel resistance at the 50 level.

These observations suggest that the EUR/GBP is likely to be staging a potential bearish impulsive downmove sequence within its major descending channel.

Watch the 0.8615 key short-term pivotal resistance with the next intermediate supports coming in at 0.8550 and 0.8500 (psychological & the swing low areas of 11 July/23 August 2023) next.

On the other hand, a clearance above 0.8615 negates the bearish tone for a minor corrective bounce to see the next intermediate resistance coming in at 0.8650 (also the 200-day moving average).

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