EUR/GBP Price Analysis: More downside risk below 0.8500

EUR/GBP maintain the selling bias on Thursday in the Asian session.
Multiple support formations near 0.8500 make a critical level to trade.
Momentum oscillators receding momentum hint at more downside in the pair.

EUR/GBP edges lower on Thursday in the Asian trading hours. The pair hovers in a very narrow trade band with no meaningful traction. At the time of writing, EUR/GBP is trading at 0.8503, down 0.06% for the day.

EUR/GBP daily chart

On the daily chart, the EUR/GBP cross currency pair fell sharply after testing the high of 0.8658 on September 29, this also constituted a double top formation with a high made on July 21. A double top candlestick technical formation is a bearish pattern. Furthermore, the spot slipped below the 21-day Simple Moving Average (SMA) at 0.8555 strengthening the case for the probable downside momentum. However, the price found shelter near the critical support near 0.8500 with the multiple support formations.

Having said that, if the price breaks the intraday low, the immediate downside target would emerge at August 16 low at 0.8483. The Moving Average Convergence Divergence (MACD) slips below the midline with a bearish crossover. Any downtick in the MACD would accelerate selling toward the 0.8470 horizontal support level followed by the low made on August 10 at 0.8450.

Alternatively, if the price reverses direction, it could move back to the 0.8520 and the 0.8550 horizontal resistance levels respectively. On a successful daily close above the 21-day SMA, the next upside target for EUR/GBP bulls could be the 0.8580 horizontal resistance zone.