EURGBP Descending Triangle Support Test, Breakdown Due?

EURGBP has been carving out a descending triangle pattern on the daily chart, with a series of lower highs connected by a falling trend line pressing down on price while a horizontal support floor near the 0.8600 major psychological level has been holding firm.

The pair is currently testing this critical support zone around 0.8615, putting it at a make-or-break juncture. If the support floor manages to hold, EUR/GBP could stage a bounce back toward the descending trend line resistance, now converging near the 0.8700 area.

The 100 SMA and 200 SMA are both drifting lower and hovering in that same region, adding another layer of resistance that sellers could defend on any recovery attempt. The 100 SMA has crossed below the 200 SMA, confirming that the path of least resistance is to the downside and that bearish momentum has the upper hand on this time frame.

A sustained break below the 0.8600 support, on the other hand, would confirm the descending triangle breakdown and could set off a measured move selloff. The height of the formation suggests that the downside target from a confirmed break could extend toward the 0.8500 level or potentially lower.

Stochastic has dipped sharply into oversold territory, with the lines just beginning to flatten out, hinting that selling pressure may be starting to ease. A crossover to the upside from this region would suggest that buyers are attempting to claw back control and could fuel a short-term recovery.

RSI, however, is still trending lower with room to slide further before reaching deeply oversold conditions, suggesting that bears have not fully exhausted themselves just yet. Price action around the support zone over the coming sessions will be key in determining whether a bounce or a breakdown follows.

EURGBP appears to be weighed down by positive political developments in the UK, as former Prime Minister Starmer stepped down and outlined a clear transition plan for the next leadership.