- The EUR/GBP seesawed in a volatile 100-pip trading session on Friday.
- Weak data from the UK and the EU left traders undecided on which direction to take.
- The EUR/GBP daily chart depicts the pair as upward biased, but the 4-hour illustrates the cross might correct towards 0.8550 before resuming the uptrend.
The EUR/GBP advances during the day, though retraced from near two-week highs around 0.8678 on Friday, amidst an upbeat market mood that triggered support for risk-sensitive currencies in the FX space, the British pound one of them. At 0.8621, the EUR/GBP is trading in the green by just 0.19%.
A volatile session characterized EUR/GBP Friday’s price action. Weaker than expected, UK’s factory data lifted the cross-currency. Nevertheless, it began to pare its losses of late after hot Eurozone inflation, alongside languish factory output, was reported, painting a gloomy scenario for the EU.
EUR/GBP Daily chart
The EUR/GBP daily chart depicts the pair as neutral-upward biased. Traders should note how the Relative Strength Index (RSI) stayed steady between 50 and 70 since May, while the EUR/GBP rallied from 0.8250 to the YTD high above 0.8700. Therefore, the EUR/GBP might extend its rally in the near term and even challenge the YTD high above 0.8700, but a break above 0.8678 is needed. On the other hand, if EUR/GBP sellers plunge prices below 0.8550, that could pave the way to the 200-day EMA at 0.8442.
EUR/GBP 4-Hour chart
In the near term, the EUR/GBP 4-hour chart depicts the pair trading inside an ascending channel that has kept the cross-currency pair trading within a 100-pip range. On Friday, the cross reached the top of the range and reversed, piercing the R2 and R1 daily pivots, each at 0.8662 and 0.8633, before settling around the 20-EMA at 0.8622. Also, the Relative Strength Index (RSI) at 50.72 accelerates its fall towards the mid-line, and a cross below would pave the way for further downside in the EUR/GBP pair.
Therefore, the EUR/GBP’s first support would be the 50-EMA at 0.8609. Break below would expose the 100-EMA at 0.8592, followed by the June 30 swing low at 0.8551.
EUR/GBP Key Technical Levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.