EUR/GBP Price Analysis: Faces rejection near 0.8700 mark, downside seems limited

EUR/GBP continued with its struggle to break through the 0.8700 round-figure mark.
The technical set-up favours bullish traders and supports prospects for additional gains.
Dips below the 0.8645-40 area could be seen as a buying opportunity and remain limited.

Haresh Menghani FXStreet

Having struggled to move beyond the 0.8700 mark, the EUR/GBP cross edged lower on Thursday and was last seen trading near daily lows, around the 0.8680-75 region. The cross has now erased the previous day's modest gains, though the near-term bias still seems tilted in favour of bullish traders.

The EUR/GBP cross last week confirmed a bullish breakout through a falling wedge pattern. This coupled with the emergence of some dip-buying near the 23.6% Fibonacci level of the 0.9218-0.8472 fall supports prospects for an extension of the recovery from one-year lows touched earlier this April.

The constructive outlook is reinforced by the fact that technical indicators on the daily chart have been gaining traction and eased from the overbought zone on the 4-hour charts. Hence, a subsequent move towards the next relevant hurdle, around the 0.8730-40 supply zone, looks a distinct possibility.

Some follow-through buying beyond the 38.2% Fibo. level should allow the EUR/GBP cross to prolong its bullish trajectory and aim back to reclaim the 0.8800 mark for the first time since early February. The momentum could further get extended towards the 50% Fibo. level, around the 0.8830-40 region.

On the flip side, any meaningful pullback might find decent support near the 0.8645-40 zone – the 23.6% Fibo. level and 50-day SMA confluence. Further weakness might still be seen as an opportunity for bullish traders and remain limited near the falling wedge breakpoint, around the 0.8600 mark.

EUR/GBP daily chart

Techical levels to watch

EUR/GBP

Overview
Today last price	0.8682
Today Daily Change	-0.0015
Today Daily Change %	-0.17
Today daily open	0.8697

Trends
Daily SMA20	0.8593
Daily SMA50	0.8632
Daily SMA100	0.8805
Daily SMA200	0.8922

Levels
Previous Daily High	0.8699
Previous Daily Low	0.8669
Previous Weekly High	0.8697
Previous Weekly Low	0.8472
Previous Monthly High	0.8674
Previous Monthly Low	0.8503
Daily Fibonacci 38.2%	0.8687
Daily Fibonacci 61.8%	0.868
Daily Pivot Point S1	0.8678
Daily Pivot Point S2	0.8659
Daily Pivot Point S3	0.8648
Daily Pivot Point R1	0.8707
Daily Pivot Point R2	0.8718
Daily Pivot Point R3	0.8737

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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