EUR/GBP Price Analysis: Bear flag, German Retail Sales tease sellers below 0.8400
- EUR/GBP remains pressured around intraday low while portraying bearish chart formation.
- Germany’s Retail Sales for June slumped 8.8% versus -8.0% forecast.
- 50-HMA increases the strength of the support, 100-HMA adds to the upside filters.
- One-week-old previous resistance line adds to the downside filters.
EUR/GBP justifies downbeat German Retail Sales for June as the cross-currency pair holds lower ground near 0.8390 amid the initial European session on Monday.
In doing so, the quote remains near the support line of a short-term bearish flag chart pattern amid a steady RSI (14).
That said, Germany’s Retail Sales dropped 8.8% YoY in June versus -8.0% market consensus and -3.6% prior.
It’s worth noting that the EUR/GBP bears need validation from the 0.8380 support confluence, including the 50-HMA and lower line of the flag, before cheering the further downside.
Also acting as the key support is the previous resistance line from July 21, near 0.8350.
Meanwhile, recovery moves may initially aim for the 100-HMA level surrounding 0.8400 before challenging the stated flag’s upper line, at 0.8425 by the press time.
In a case where EUR/GBP bulls keep reins past 0.8425, the odds of witnessing an extended run-up towards July 25 swing high near 0.8525 can’t be ruled out.
Overall, EUR/GBP is likely to remain pressured but the bears have a bumpy road ahead.
EUR/GBP: Hourly chart
Trend: Further downside expected