EUR/GBP Price Analysis: Probing the 50-DMA at 0.8500 after a three-day rally

EUR/GBP is set to finish the week with gains of 0.49%.
Euro buyers stepped in around weekly lows below 0.8400, under the 20, 50, and 200-DMAs.
A daily close above 0.8500 might open the door for a re-test of 0.8600.

Christian Borjon Valencia FXStreet

The EUR/GBP extended its rally to three consecutive days, breaking on its way north the 100-day EMA, though it struggled to get above the 50-day EMA after reaching a daily high at 0.8511. At the time of writing, the EUR/GBP is trading at 0.8493, above its opening price by 0.50%.

EUR/GBP Price Analysis: Technical outlook

From a daily chart perspective, the EUR/GBP shifted from neutral-downwards to neutral. In the last week, broad euro weakness tumbled the pair from current price levels towards 0.8400. However, EUR buyers stepped in around weekly lows at around 0.8386 and sent the cross-currency rallying toward the 0.8500 figure.

Worth noting that during the last three days, the EUR/GBP rally sparked a jump in the Relative Strength Index (RSI), a sign that momentum is on the side of buyers. Additionally, the break of a one-month-old downslope trendline around 0.8450 exacerbated a rally towards today’s high at 0.8511. So a break above the 0.8500 mark is on the cards.

Therefore, the EUR/GBP first resistance will be the confluence of the 50-day EMA at 0.8499 and the 0.8500 figure. Once cleared, the next stop will be Friday’s high at 0.8511, which, once broken, would aim towards a two-month-old downslope trendline around 0.8550 before climbing to the July 21 high at 0.8584.

EUR/GBP Daily chart

EUR/GBP Key Technical Levels

Overview
Today last price	0.8493
Today Daily Change	0.0033
Today Daily Change %	0.39
Today daily open	0.8459

Trends
Daily SMA20	0.8425
Daily SMA50	0.8502
Daily SMA100	0.8472
Daily SMA200	0.8438

Levels
Previous Daily High	0.8467
Previous Daily Low	0.8425
Previous Weekly High	0.8493
Previous Weekly Low	0.841
Previous Monthly High	0.8679
Previous Monthly Low	0.8346
Daily Fibonacci 38.2%	0.8451
Daily Fibonacci 61.8%	0.8441
Daily Pivot Point S1	0.8434
Daily Pivot Point S2	0.8408
Daily Pivot Point S3	0.8392
Daily Pivot Point R1	0.8475
Daily Pivot Point R2	0.8492
Daily Pivot Point R3	0.8517

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.

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