Once again, Europe’s shared currency (EUR) is on the back foot against the British pound (GBP), down -0.2% (WTD) and navigating waters south of weekly support from £0.8511.

Vulnerable Support on the Weekly Chart

What’s also interesting from a technical standpoint is that the cross-currency pair is now seen testing the lower boundary of a descending triangle pattern on the weekly scale, extended from the low of £0.8499. Any break of this base could have the unit take aim at support from £0.8455. Supporting further underperformance in the currency pair is price action on the daily chart recently venturing below ascending support, drawn from the low of £0.8493, with support on this chart calling for attention at £0.8474, a 1.272% Fibonacci projection ratio. Also noteworthy is the Relative Strength Index (RSI) fast approaching oversold territory.

H1 Prime Resistance to be Challenged?

In view of the daily chart demonstrating scope to discover lower levels – action informing traders that weekly price may step below the lower boundary of the ascending triangle – this opens the door for a short-term sell-on-rally scenario on the H1 chart. Assuming price remains north of H1 Quasimodo support coming in at £0.8497, this may prompt a reaction from prime resistance at £0.8511-£0.8506, which could lead to fresh lows forming beneath Monday’s trough at £0.8489.

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