EUR/GBP has stalled in its recovery from the September 24 lows and is resuming its downward bias. The pair is in both a short- and medium-term downtrend, which, according to technical analysis principles stating that “the trend is your friend,” suggests that this downward movement is likely to continue.
EUR/GBP Daily Chart
That said, EUR/GBP has now reached the initial downside target for the bearish move that began at the August 5 high, which could signal the end of its decline. This target corresponds to the 61.8% extrapolation of the initial downward move from August, prior to the channel formation in early September.
A break below the September 24 low of 0.8317 would reaffirm the continuation of the downtrend toward the next target at 0.8287, the low from August 2022. Additionally, the Relative Strength Index (RSI) has exited the oversold territory following the bounce on September 24, suggesting that a stronger correction could still occur.
