By Mohammed Isah of fxtechstrategy.com
: Bear pressure continues to force the euro-pound pair lower.
The latest price action leaves the cross currency pair targeting its 2010 low at 0.8209, where a halt may be seen. But if that level breaks, the pair will resume its medium-term trend toward the psychological level at 0.8000.
The daily relative strength index, or RSI, is bearish and pointing lower, supporting this view.
In order for the euro to reverse its recent trajectory against the pound, it must break and hold above its June 20 high at 0.8384. This will open the door for more strength toward the May 6 and May 27 highs at 0.8421/0.8426, where a reversal of roles could occur and turn EUR-GBP lower again. However, if the pair trades above that 0.8421/0.8426 area, it could make a push toward its May 28 high at 0.8546.
Overall, with a halt in the euro-pound pair's recovery seen and the current bear pressure, the risk remains for the pair to head lower toward its 2010 low at 0.8209.
Mohammed Isah is a technical strategist and head of research at FXTechstrategy.com, a technical-research Web site. He has been trading and analyzing the foreign exchange market for the past seven years. He formerly traded stocks before crossing over to the forex market, where he worked for FXInstructor LLC as a technical analyst and head of research before joining FXTechstrategy.com. He has written extensively on the forex market and technical analysis and his articles have been featured in The Technical Analyst Magazine, The Forex Journal Magazine, The International Business Times and FXstreet.com. At FXTechstrategy.com, he writes daily, weekly and long-term technical commentaries on currencies and commodities, which are offered to its clients. He also produces
for his subscribers. He provides full coverage of the forex market with specific focus on G10 currencies as well as the commodities markets, with focus on five key commodities.