EUR/GBP has seen a significant downturn after breaching the 200-Day Moving Average (DMA) last month, currently positioned at 0.8625. Analysts at Société Générale offer insights into the pair’s future prospects.
The Initial Support at 0.8490:
EUR/GBP is hovering around the low point from last August, approximately at 0.8490, which may act as an initial support level.
Positive Divergence in Daily MACD:
The daily Moving Average Convergence Divergence (MACD) indicator is showing signs of positive divergence, indicating a potential decrease in downward momentum.
Temporary Pause in the Downtrend:
There appears to be a temporary halt in the downward movement; however, a retest of the 200-DMA around 0.8625 cannot be discounted. A successful breach of this level is necessary to confirm an extended upward movement.
Potential for Further Correction:
Should the pair fail to hold above 0.8490, it could pave the way for a continuation of the correction towards the projected levels of 0.8455 and 0.8385.
