EUR/GBP Price Analysis: Marches steadily for four straight days, back above 0.8600
|- The common currency stages a recovery and gains vs. the pound, up by some 0.41% in the week.
- The market mood remains fragile, though choppy trading is expected in the pair.
- EUR/GBP Price Analysis: Per the daily and 4-hour chart, the pair is upward biased, and a re-test of the YTD highs is on the cards.
The EUR/GBP climbs for the fourth trading session, up by 0.44% on Wednesday amidst a mixed market mood. At 0.8615, the EUR/GBP trades near weekly highs around 0.8624 after bouncing off 0.8568 daily lows printed earlier.
Depicting the mixed sentiment is European bourses trading in the red while US equities rise. The euro rallied after UK’s inflation rose above the 9% threshold and despite a dismal EU Consumer Confidence, which didn’t deter EUR/GBP traders from opening fresh bets against the stagflationary scenario looming in the UK.
EUR/GBP Price Analysis: Technical outlook
EUR/GBP Daily chart
The EUR/GBP is still upward biased, despite the June 15 reversal, in which the pair plummeted 100 pips. Despite the setback, the EUR/GBP has trimmed 50% of those losses. Traders need to be aware that the exchange rate remains above the spot price, meaning that the upward bias remains intact in the near term. Also, the Relative Strength Index (RSI) in the bullish territory aims higher and has broken above the RSI’s 7-period SMA.
EUR/GBP 4-hour chart
In the near term, the EUR/GBP remains in an uptrend, as well as the daily chart. However, the EUR/GBP faces solid resistance at the R2 daily pivot point around 0.8628. The good news for EUR/GBP bulls is that the 20-hourly EMA has crossed above the 50-EMA one, meaning buyers are stepping in to propel the cross towards higher prices.
Therefore, the EUR/GBP first resistance would be the mentioned-above R1 daily pivot around 0.8628. A breach of the latter would expose the 0.8700 figure, followed by the YTD high around 0.8721.
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