EUR/GBP Price Analysis: Remains below range lows, poised to continue south
■EUR/GBP continues trading below a multi-month range it was in for most of the start of 2024.
■It failed to break back inside at the last retest and there is a risk of more downside evolving.
EUR/GBP continues trading below the base of the multi-month range it broke out of on May 22. After the pair fell to a low of 0.8484 on May 29, it pulled back and retested the base of the range on May 31. The retest failed and since then EUR/GBP has been going down again.
EUR/GBP Daily Chart
When prices break out below ranges they usually fall to a target that is at least a 0.618 Fibonacci ratio of the height of the range extrapolated lower. This gives a target between 0.8484 and 0.8479 depending on where you measure the height of the range. Price just tipped the top of this target zone at the bottom of the May 29 sell-off.
A break below the 0.8484 low (May 29) would confirm more weakness, probably to a target at around 0.8452, which represents the full height of the range extrapolated lower.
Alternatively a break above the May 31 high at 0.8541 would bring the bearish bias into doubt.
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