EUR/GBP ends its pullback, resumes downtrend

The EUR/GBP has finished pulling back and resumed its downtrend. It has broken below the 0.8317 September 24 low, confirming a lower low and extension towards the next target at 0.8287, the August 2022 low.

It remains in a downtrend on a short and medium-term basis, and given the principle that “the trend is your friend” the odds favor an extension.


That said, the Relative Strength Index (RSI) is converging bullishly with price when comparing the September 24 low with the lower low of October 1 (red dashed lines on chart). Although the price has declined, the RSI has not.

This signifies a lack of downside momentum accompanies the latest sell-off. This increases the risks it could stall or even pullback.