EUR/GBP Price Analysis: Faces solid resistance around 0.8770s, falls to 0.8720
- EUR/GBP drops below the 20-day as buyers’ momentum abate.
- The Relative Strength Index (RSI) pierced the 50-midline but is almost flat.
- The EUR/GBP 4-hour chart portrays a rising-wedge formed, targeting a fall towards 0.8600.
The EUR/GBP bounces off Tuesday’s close price and is edging higher, though solid resistance at around the 20-day EMA at 0.8768 put a lid on the cross-currency uptrend, retreating just below Tuesday’s high. However, the EUR/GBP remains positive, trading at 0.8726, above its opening price by 0.31%.
EUR/GBP Price Analysis: Technical outlook
During the last seven days, the pair’s volatility increased after the UK’s tax cut budget. Nevertheless, once the government backpedaled, the EUR/GBP tumbled from around 0.9277 to 0.8647 before recovering some ground. Given that the cross-currency pair dropped below the 20-day EMA and has been unable to crack it, the EUR/GBP is neutral bias. Additionally, the Relative Strength Index (RSI) entered the bearish territory but so far recovered and pierced the 50 mid-line. Nevertheless, price action’s failure to hold to gains above the 20-day EMA shows buyers might be losing momentum.
Short term, the EUR/GBP 4-hour chart depicts a rising-wedge formation, opening the door for further losses. If the EUR/GBP breaks below the bottom-trendline of the wedge, it could pave the way for further losses.
Therefore, the EUR/GBP first support would be the daily pivot at 0.8699. Once cleared, the next support would be the 200-EMA at 0.8679, followed by the S1 daily pivot at 0.8650, followed by the S2 daily pivot at 0.8600.
EUR/GBP Key Technical Levels
Author
Christian Borjon Valencia
FXStreet
Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.
