EUR/GBP. Analysis and Forecast

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The euro has given up its earlier gains and is now continuing to decline against the British pound. An attempted rebound from Monday's low at 0.8675 was rejected near the 0.8700 level, and the pair has now dropped below the 50-day SMA. At present, the euro has failed to take a defensive position, with all attention focused on France, where the unexpected resignation of Prime Minister Lecornu has heightened concerns about the fragility of the country's financial system. Rating agencies are warning of possible further credit rating downgrades.

On the other side of the pair, the pound is not in much better shape. Recent data showed a noticeable slowdown in the services sector, while a Bank of England survey released on Tuesday indicated that hiring plans among UK companies had fallen to their lowest levels since 2020.

From a technical standpoint, the Relative Strength Index on the daily chart has moved into negative territory, confirming the bulls' weakness in challenging resistance. Prices have also fallen below the 50-day SMA, heading toward the next support level at 0.8635. The 50-day SMA now acts as resistance, above which bulls will attempt to push back toward the round 0.8700 level. As long as the RSI remains in negative territory, it will be difficult for buyers to overcome the 50-day SMA resistance.

The table below shows the percentage change of the euro against major currencies for today. The euro has shown the greatest strength against the New Zealand dollar.

The material has been provided by InstaForex Company - www.instaforex.com