EUR/GBP Price Forecast: Downtrend resumes

• EUR/GBP appears to have stagnated after pulling back from the September 24 lows.
• The pair may resume its downtrend and may decline.

EUR/GBP is stalling in the pullback from the September 24 lows and resuming its downtrend.

The pair is in a short- to medium-term downtrend, which given the technical analysis theory that “the trend is your friend” is more likely to continue.

EUR/GBP daily chart

That said, EUR/GBP has now hit the first downside target for the bearish move that started at the August 5 high, and this could signal the end of its decline. The target is the 61.8% extrapolation of the initial move down during August before the channel that formed in early September.

A break below the September 24 low of 0.8317 would reaffirm the continuation of the downtrend towards the next target at 0.8287, the August 2022 low.

The Relative Strength Index (RSI) has broken out of oversold following the September 24 rally and this could indicate the risk of a stronger correction further higher.