EUR/GBP Price Analysis: Bears are pushing towards the 0.8600 support area

• The euro accelerates its downtrend and approaches 0.8600.
• Bears have taken over after the ECB confirmed market expectations.
• The pair should return above 0.8690 to ease negative pressure.

The euro is accelerating its downtrend on Thursday’s US session, as the pair’s reversal from session highs at 0.8690, extends to the vicinity of 0.8600 to test support at the 100-day SMA.

The bears took hold of the common currency after the European Central Bank confirmed market expectations and hiked interest rates by 0.75% for the second consecutive time, leaving its deposit rate at 1.5%, its highest level since 2009.

The pair squeezed lower immediately after the release of the ECB’s monetary policy decision, against a British pound that remains favored by the investors’ relief after Rishi Sunak’s appointment as British prime minister.

From a technical point of view, the euro’s failure to return above the 50-day SMA has increased downside pressure, pushing the pair toward the 100-day SMA at 0.8600. Below here, the next downside targets would be the downward trendline support, from mid-November lows, now at 0.8535, and the 200-day SMA at 0.8500.

On the upside, a bullish reaction would have to extend past the mentioned 50-day SMA, at 0.8690 to aim for the October 21 high at 0.8780. A confirmation above the mentioned level would negate the bearish trend and open the path toward October 12 high at 0.8870.

EUR/GBP daily chart

Technical levels to watch