EUR/GBP has finally moved below the 0.8900 support level and yesterday’s closing currently suggests a further drop in the pair. The decline is mainly attributed to the selling pressure in Euro which dropped from a recent 3 months high. The pair is trading at 0.8892, the immediate resistance is at 0.8917 while stronger resistances are present at 0.8945 and 0.8970 levels. The intraday support is at 0.8845 another support is present at 0.8922.

The SMA-21 is indicating a resistance area at 0.8984 and the SMA-50 is indicating resistance at 0.9020. The RSI has moved lower from the neutral zone and now favors the bearish bias. The MACD is also below the zero line, however, despite the decline, the 0.8860 area is likely to act as a major support area. Therefore a sell entry is only favored on a slight rally. A decent selling point would be at or near 0.8925 with a target of 50 to 60 pips. A tight stop-loss for this sell position would be just above the 0.8970 resistance level.

An intraday closing below 0.8960 would likely accelerate the downtrend. On the Upside, the 0.8970 is likely to act as a stiff resistance area.

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By LCMS Traders FX Analysis Team

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