EUR/GBP Price Analysis: Extends bounce off 50-DMA above 0.8500
- EUR/GBP pokes intraday high, snaps two-day downtrend.
- Steady RSI line favor recovery moves towards 10-week-old resistance line.
- Key Fibonacci retracement levels, 200-DMA act as additional resistances.
EUR/GBP prints the biggest daily gains of the week, up 0.14% intraday around 0.8525 heading into Wednesday’s London open.
The cross-currency pair dropped to a one-week low the previous day before bouncing off 50-DMA and 38.2% Fibonacci retracement (Fibo.) of September-November declines.
Although the firmer RSI line favors the latest recovery, a clear break of the 50% Fibo. level near 0.8520 becomes necessary for the bulls to keep reins.
Following that, a descending trend line from late October and 61.8% Fibonacci retracement level, respectively around 0.8545 and 0.8555, will challenge the EUR/GBP buyers.
It should be noted, however, that the pair’s run-up beyond 0.8555 will need validation from the 200-DMA level of 0.8560.
Alternatively, a daily closing below the 50-DMA level around 0.8480 will highlight multiple supports around 0.8460 and 0.8420 for EUR/GBP sellers.
However, the pair’s weakness past-0.8420 will be challenged by November’s low of 0.8380, which is also the lowest level since early 2020.
EUR/GBP: Daily chart
Trend: Further recovery expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
