EUR/GBP Price Forecast: Decline, extension of downtrend

• EUR/GBP fell and extended its downtrend on Tuesday.
• The RSI shows that the lack of bearish momentum accompanies the move and converges with price.

EUR/GBP is turning lower after a brief pullback and continues its broader downtrend on Tuesday.

EUR/GBP 4-hour chart

The pair breaks below the September 24 low of 0.8317, confirming an extension of the downtrend towards the next target at 0.8287, the August 2022 low.

The Relative Strength Index (RSI) is bullishly converging with price when comparing the September 24 low and the current one (dashed red lines on the chart). Although the current low is below the September 24 low, the RSI is not. This disconfirmation means that the lack of negative momentum is accompanying the current selling and could be a sign that it will soon run out.

EUR/GBP has already hit the first downside target for the move that started at the August 5 high at 0.8322. This is the 61.8% extrapolation of the August selloff before the shallow channel formed in early September. An additional downside beyond the target could therefore be a sign of overextension.