EUR/GBP slips as bearish pressure mounts
EUR/GBP is trading on the lower end of its weekly range near the 0.8540 price zone on Tuesday.
On Tuesday, the EUR/GBP exchange rate slipped to the 0.8540 price zone, trading near its weekly low. The pair's decline was driven by bearish sentiment, fueled by Iran's blockade of the Strait of Hormuz and the United States' counterblockade of Iranian ports. Additionally, a Panama-flagged ship was attacked by US forces while attempting to cross the Strait, further dampening sentiment.
The British pound demonstrated a firmer tone, contributing to the downtrend of the EUR/GBP pair for two consecutive days. On Wednesday, the primary driver for the exchange rate will be Germany's Harmonized Index of Consumer Prices (HICP). The following day, the preliminary release of the United Kingdom's Gross Domestic Product (GDP) will provide further insight into the pair's direction.
On the 4-hour chart, EUR/GBP is currently at 0.8545, displaying a slightly bearish short-term outlook as it is confined below both the 100-period Simple Moving Average (SMA) at 0.8551 and the 20-period SMA at 0.8559. Momentum appears to be weak, with the Relative Strength Index (RSI) near 37, indicating potential further downside despite the pair inching away from oversold territory.
The initial resistance is at 0.8547, followed by a tighter barrier at 0.8551, which coincides with the 100-period SMA. A horizontal level aligns with this SMA, and a stronger cap for any recovery attempts is at the 20-period SMA at 0.8559. Should the pair break below the lower band, it could signal more short-term weakness.
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