EUR/GBP COntinue the Downtrend, as it Returns Below the 50 Daily SMA Again

EUR/GBP retraced higher yesterday, but today it has returned back down, so the larger bearish trend continues

Skerdian Meta•Tuesday, February 4, 2020•1 min read

The price has slipped below the 50 SMA again

EUR/GBP has turned bearish in late August, after manufacturing fell deeper into recession in Germany and the Eurozone, which forced the ECB to turn even more dovish. They cut deposit rates further in September and started another QE programme in November, which has been keeping the Euro bearish.

The GBP, on the other hand, turned bullish after UK elections in December. It has cooled off somewhat this month, but it is still bullish, especially compared to the Euro. Moving averages have turned into resistance now, with the 50 SMA (yellow) doing that job a few times and the 20 SMA pushing lower when the downside picked up pace.

Yesterday we saw this pair retrace higher and the price moved above the 20 SMA. The 50 SMA (yellow) provided resistance for some time, but buyers pushed above it as the GBP was sliding. But, the price has returned below the 50 SMA now on the daily chart, so the larger bearish trend will likely continue for this pair.

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ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.