- EUR/GBP attracted dip-buying on Wednesday and turned positive for the second successive day.
- The overnight break through the 0.8615 horizontal barrier supports prospects for additional gains.
- Bullish technical indicators on the daily chart further add credence to the near-term positive bias.
The EUR/GBP cross reversed an early European session dip and turned positive for the second straight session on Wednesday. The momentum pushed the cross to over two-month tops, around the 0.8640 region in the last hour, though lacked any follow-through.
The British pound's relative underperformance comes amid increasing signs of the fuel crisis in the United Kingdom due to the post-Brexit shortage of truck drivers. However, a broad-based US dollar strength continued weighing on the shared currency and kept a lid on any further gains for the EUR/GBP cross.
From a technical perspective, the overnight convincing break through a horizontal resistance near the 0.8615 region was seen as a key trigger for bulls. However, overbought RSI on hourly charts held traders from positioning for any further appreciating move and capped the EUR/GBP cross just below 200-day SMA.
On the daily chart, oscillators are still far from being in the overbought territory and support prospects for a move beyond the technically significant moving average. This, in turn, will set the stage for a move towards July monthly swing highs, around the 0.8670 region en-route the 0.8700 round-figure mark.
On the flip side, any pullback might now be seen as a buying opportunity and remain limited near the mentioned resistance breakpoint. This is closely followed by the 0.8600 mark, which if broken decisively might prompt some technical selling and drag the EUR/GBP cross back towards the 0.8550-45 support zone.
EUR/GBP daily chart
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Technical levels to watch
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