Slips below 0.8600 on tweezers-top and inverted hammer

• EUR/GBP trades at 0.8595, down 0.12%, as traders position for a possible ECB rate hike of 25 basis points.
• Daily chart shows a tweezers-top inverted hammer, indicating potential for further losses; key support at 50-day MA of 0.8580.
• One-hour chart suggests next support at 0.8587; resistance levels emerge at 50-HMA of 0.8598 and 0.8600 figure.

The Euro (EUR) loses territory against the Pound Sterling (GBP), as traders brace for tomorrow’s European Central Bank (ECB) monetary policy decision. Despite odds the ECB would raise rates by 25 basis points, it was no excuse for EUR/GBP traders to short the pair ahead of the meeting. The cross-currency pair exchanges hands at 0.8595, down 0.12%.

EUR/GBP Price Analysis: Technical outlook

The daily chart portrays the pair reaching a four-week high at 0.8630 but erased those gains and formed a tweezers-top inverted hammer, which could pave the way for further losses. But a daily close at around 0.8592 is needed to cement a downward correction. In that case, the cross-currency next support would be the 50-day Moving Average (DMA) at 0.8580, followed by the September 12 swing low of 0.8569. Upside risks emerge at the current week’s high of 0.8630.

The one-hour chart portrays the pair failed to extend its gains past the daily high and retreated below the previous higher-low of 0.8603, opening the door for further downside. The next support would be 0.8587, followed by the 200-hour Moving Average (HMA) at 0.8572. On the flip side, the EUR/GBP first resistance would be the 50-HMA at 0.8598, the 0.8600 figure, and the next swing high at 0.8616.

EUR/GBP Price Action – Daily chart