EUR/GBP short-term bias weaker, nearby resistance keeps pressuring.

EUR/GBP is trading in a tight narrow range of 0.8574-0.8676 which is part of the three-month-old bear trend.

The soft upward move in the RSI and the MACD reflects a weaker short-term bearish bias but a closing price above the 0.8676 resistance could attract some buying interest towards 0.8753, which is 23.6% Fibonacci retracement of the down-leg from 0.9324 to 0.8574. Slightly higher, a breach of the 0.8800-0.8860 noisy area, where the 38.2% Fibonacci and the longer-term SMAs are placed, could question the strength of the downtrend, with the spotlight turning next to the 50% Fibonacci of 0.8950.

On the other hand, a drop under 0.8574 could initially pause around 0.8520 and then near the March trough of 0.8474, while beneath the latter the 0.8400 round-level could also prove a tough obstacle.

Meanwhile, in the medium-term picture, EUR/GBP continues to follow a negative direction and only a rally above 0.8900 could eliminate the bearish sentiment. However, with the 50- and the 200-day SMAs preparing for a bearish cross, such a move could come later than sooner.

Summarising, EUR/GBP bears look to be losing strength in the short-term though only a decisive rebound above 0.8676 could confirm that, while in the medium-term, a steeper upturn above 0.8900 is required to return neutrality.


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This information is not considered as investment advice or investment recommendation but instead a marketing communication. This material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.

Source: XM

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