EUR/GBP Price Analysis: Buyers stepped in around 0.8700, defending a two-week-old trendline

The EUR/GBP climbs after testing a two-week upslope trendline, drawn from the September 2 and 14 lows that pass through the 0.8700 figure. During the day, the EUR/GBP tumbled to the daily low, below the previously-mentioned trendline at 0.8691, but bounced off and hit a daily high at 0.8760 before stabilizing at current exchange rates. At the time of writing, the EUR/GBP trades at 0.8737, above its opening price.

EUR/GBP Price Analysis: Technical outlook

From a daily chart perspective, the EUR/GBP dip towards 0.8700 was on the cards. Oscillators, particularly the Relative Strength Index (RSI), peaked just below entering overbought conditions three times since August 31, opening the door for a retracement. Once the Bank of England’s (BoE) decision was known, the euro gained traction, and buyers reclaimed the 0.8700 thresholds, maintaining the upward bias intact.

Switching to an intraday time frame, the EUR/GBP four-hour chart illustrates the pair as neutral-to-downward biased, with some solid resistance levels above the current exchange rate that might cap the EUR/GBP recovery. Break above the EUR/GBP 0.8760 daily high could pave the way toward the YTD high at 0.8787, ahead of the 0.8800 psychological level.

Contrarily, a drop below the S1 daily pivot at 0.8702 would expose the weekly low at 0.8691, followed by the confluence of the S2 pivot and the 100-EMA at around 0.8680/82, and then the September 14 low at 0.8625.

EUR/GBP Key Technical Levels