EUR/GBP: Correction could extend towards 0.8455 and 0.8385 on failure to defend 0.8490 – SocGen

EUR/GBP has experienced a deeper down move after giving up the 200-Day Moving Average (DMA) last month now at 0.8625. Economists at Société Général analyze the pair’s outlook. 

0.8490 is first support

EUR/GBP is in vicinity to low of last August near 0.8490 which could be an interim support.

Daily MACD has started posting positive divergence denoting receding downward momentum.

The down move has tentatively stalled; retest of 200-DMA near 0.8625 can’t be ruled out. This must be overcome to confirm an extended bounce.

In case the pair fails to defend 0.8490, the phase of correction could extend towards projections of 0.8455 and 0.8385.