Correction ends and downtrend resumes

• EUR/GBP ends its pullback and resumes its bearish tempo. 
• The RSI is converging bullishly with price, however, signifying a lack of bearish momentum accompanies the latest move.

EUR/GBP has finished pulling back and resumed its downtrend. It has broken below the 0.8317 September 24 low, confirming a lower low and extension towards the next target at 0.8287, the August 2022 low. 

It remains in a downtrend on a short and medium-term basis, and given the principle that “the trend is your friend” the odds favor an extension.

EUR/GBP Daily Chart 

That said, the Relative Strength Index (RSI) is converging bullishly with price when comparing the September 24 low with the lower low of October 1 (red dashed lines on chart). Although the price has declined, the RSI has not. This signifies a lack of downside momentum accompanies the latest sell-off. This increases the risks it could stall or even pullback. 

EUR/GBP has already reached the conservative target for the bear move that began at the August 5 high, at 0.8322. This is the 61.8% extrapolation of the August sell-off. Further downside beyond the target, therefore, could be characterized as “higher hanging fruit” and the whole downward move since the August 5 high may even have completely run its course.