With gloomy market sentiment driven by the Russia-Ukraine war and continued sanctions against Russia, EUR/GBP is barely moving on Thursday.
The risk appetite decreased as equity prices remained under pressure. The Federal Reserve stated it is ready to begin quantitative tightening at the end of May in its minutes. $95 billion will be reduced each month, made up of $80 billion of US Treasury securities and $15 billion of mortgage-backed securities. Investors will monitor the ECB's March meeting minutes that will be released today while they are looking forward to Huw Pill's speech at the BoE.
On the daily chart, the EURGBP pair has been trading in a descending channel since February 2021, as the channel's lines have held reliable dynamic support and resistance. The Diverging moving averages with a negative slope endorse a prevailing bearish bias with the price trading below the 50-day EMA, heading towards the 0.83041 previous level of interest. Some consolidation is expected at this crucial boundary. However, a decisive break of this obstacle would encourage more sellers to join the bear party, aiming for 0.82596 around the channel's lower edge. Overstepping this barrier, the next support could be placed around the six-year low at 0.82026 on March 7.
Conversely, should the 0.83041 barrier attract buyers to return to the market, the immediate resistance would rise at the 0.83536 mark. Passing this obstacle could pave the way toward the 50-day EMA, in line with 0.83771.
Momentum oscillators imply a mixed picture. RSI is pulling out from the neutral zone into the selling area, and momentum is retreating from its peak in the buying region. At the same time, we see the MACD histogram crossing below zero while the signal line is trending up in the opposite direction.
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