EUR/GBP recorded a steep rally in recent weeks to touch the 0.9325 area, before retreating somewhat. The price structure on the daily chart consists of higher highs and higher lows, while the 50-day simple moving average (SMA) has also crossed above the 200-day one, keeping the outlook positive overall.
Momentum oscillators, however, suggest that the latest pullback may continue for now. The RSI has flattened just below its 70 level, while the MACD – although positive – could test its red trigger line soon.
In case the recent corrective retreat continues, initial support may come from the 0.9190 level, the July 30 top. A downside break could open the door for a test of 0.9050, but for the bullish outlook to turn to a more neutral one, the sellers would also need to pierce below the 0.8890 area.
If the bulls retake control, immediate resistance could be found at 0.9325. A decisive move above that hurdle could confirm a resumption of the bigger uptrend, allowing the bulls to challenge 0.9415 – the October 2009 peak. Even higher, the 0.9500 level would also attract attention.
In brief, the big picture is clearly positive, with a move below 0.8890 needed to bring that into question.
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