This week’s aggressive selloff leaves the EURGBP overextended, particularly when we compare today’s price with the 10 and 20 EMAs in the chart below.
With this in mind, a bounce from the 0.8780 area early next week would not be a surprise. In fact, I’ll be keeping an eye on this level for a second opportunity to get short.
A daily close below the 0.8780 handle over the coming weeks would expose the next key support at 0.8600. A close below that would target the unfilled gap from April 21st at 0.8369.