• EUR/GBP remains on the back foot at weekly low during four-day losing streak, holds lower ground of late.
• Oversold RSI (14) conditions, pre-ECB anxiety check pair sellers targeting six-week-old horizontal support.
• Intraday buyers need validation from 0.8585 to retake control.

EUR/GBP languishes near the weekly low surrounding 0.8560 as bears struggle ahead of Thursday’s all-important European Central Bank (ECB) monetary policy decision. Even so, the cross-currency pair remains bearish for the fourth consecutive day, poking the lowest level since July 14 of late.

It should be noted that the pre-ECB consolidation joins the oversold conditions of the Relative Strength Index (RSI) line, placed at 14, to challenge the EUR/GBP bears. However, the bearish MACD signals join dovish expectations from the ECB, despite a likely 0.25% rate hike, to keep the sellers hopeful.

Also favoring the EUR/GBP bears is the pair’s inability to cross the key moving averages during early Wednesday’s corrective bounce.

With this, the cross-currency pair appears well set to test the 10-week-old horizontal support zone surrounding 0.8520. However, the 11-month low near 0.8500, marked earlier in July, could test the EUR/GBP bears afterward.

In a case where the quote remains bearish past 0.8500, it becomes vulnerable to drop toward the February 2022 peak of near 0.8475.

On the flip side, the 200-SMA level of 0.8580 guards the immediate upside of the EUR/GBP pair ahead of the convergence of the 100-SMA and one-week-old descending resistance line, close to 0.8585 by the press time.

Following that, the quote may aim for the tops marked on June 22 and 28, respectively near 0.8635 and 0.8660, before challenging the monthly top of 0.8700.

EUR/GBP: Four-hour chart

Trend: Limited downside expected

ADDITIONAL IMPORTANT LEVELS