EUR/GBP Price Forecast: Pulling back within downtrend

• EUR/GBP is correcting back after an extended down move which took the pair to a key target level. 
• The RSI momentum indicator has exited oversold and given a buy signal. 

EUR/GBP has pulled back after trending lower. It remains in a short and medium-term downtrend, however, suggesting the decline could resume. It is a principle of technical analysis that “the trend is your friend” which means that the odds favor a continuation of the bear trend for EUR/GBP.  

EUR/GBP Daily Chart 

That said, EUR/GBP has reached a potential downside target for the bear move that began at the August 5 high when it reached the top of its range. As such it may have completed its bearish decline. The target is the 61.8% extrapolation of the initial move down during August before the channel that formed in early September and pulled back higher for two weeks.  

A break below the 0.8317 September 24 low would reconfirm a continuation of the downtrend towards the next target at 0.8287, the August 2022 low. 

The Relative Strength Index (RSI) has exited oversold, suggesting the risk of an extended correction unfolding to the upside.