EUR/GBP Breach of Support Signals Downside Risk Toward 0.8290–0.8320

The EUR/GBP currency pair is showing signs of increased bearish momentum as it breaks through the critical support zone between 0.8395 and 0.8415. This range had previously acted as a significant consolidation area for over two months, providing a solid floor for the pair. However, as of Friday, the pair is decisively challenging the 200-day Moving Average (200-DMA) — a key technical level watched closely by institutional and retail traders alike.

Technical Breakdown: The Bearish Case Strengthens

The break below the 0.8395–0.8415 range is particularly notable because it signals a potential shift in sentiment. This zone had held strong during previous downward attempts, suggesting that bulls were willing to defend it. However, the current price action shows that sellers are regaining control, and momentum indicators such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) are starting to confirm the downside bias.

• RSI is now trending below the 50 mark, indicating weakening bullish momentum.
• MACD has crossed into negative territory with widening histogram bars, further confirming the bearish tone.
• The pair is now testing the 200-DMA, which sits slightly below the 0.8390 mark. A daily close below this moving average would provide the market with technical confirmation of a breakdown.

What’s Next? Eyes on 0.8290 – 0.8320

If EUR/GBP decisively closes below the 200-DMA, it opens the path toward the next significant support level around 0.8290–0.8320. This area acted as a base back in early February and aligns with a confluence of Fibonacci retracement levels and previous price action lows. A sustained move into this zone could provide traders with opportunities to capitalize on the trend continuation.

Fundamental Backdrop Adds Pressure

The fundamental narrative is also skewed in favor of GBP strength. The UK has recently released stronger-than-expected inflation and wage growth data, suggesting the Bank of England might remain on the hawkish side compared to the European Central Bank, which has leaned dovish in light of stagnating Eurozone growth and subdued inflation. This divergence in monetary policy expectations adds another layer of bearish pressure on the EUR/GBP pair.

Risk Management Ahead of the Weekend

Traders should note the typical reduction in market liquidity ahead of weekends, particularly when key technical levels are being tested. The current hesitation reflects the market’s reluctance to hold positions over the weekend, especially with high-impact data or geopolitical risks looming.

However, if today’s candle closes firmly below the 200-DMA, the technical case becomes too strong to ignore.

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