EUR/GBP pulled back after failing to break above resistance at 0.8735/0.8765. While support at 0.8590 and the 50-DMA has held, a sustained rebound toward 0.8700 is possible, though a breach of 0.8590 could trigger a deeper decline, Société Générale's FX analysts note.
Interim low at 0.8590 holds for now
"EUR/GBP encountered strong resistance at graphical levels of 0.8735/0.8765 representing the highs of November 2023 and April. It has staged a quick pullback after this test. The pair has carved out an interim low near 0.8590 and successfully defended the 50-DMA."
"A brief rebound towards 0.8700, the 61.8% retracement of recent decline, cannot be ruled out. There will be a risk of a deeper decline if the recent pivot low of 0.8590 is breached."
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