EUR/GBP Price Analysis: Seems poised to test 0.8730-40 supply zone

EUR/GBP attracted some dip-buying and turned positive for the second straight session.
The technical set-up favours bullish traders and supports prospects for additional gains.
Any meaningful pullback might still be seen as an opportunity to place fresh bullish bets.

Haresh Menghani FXStreet

The EUR/GBP cross reversed an intraday dip to the 0.8670-65 area and turned positive for the second consecutive session on Wednesday. The cross was last seen hovering near the top end of its daily trading range, with bulls making a fresh attempt to build on the momentum beyond the 0.8700 mark.

Looking at the technical picture, the EUR/GBP cross attracted some dip-buying near the 23.6% Fibonacci level of the 0.9218-0.8472 decline. This comes on the back of a bullish breakout through a falling wedge pattern and supports prospects for an extension of the recovery from one-year lows.

The constructive set-up is reinforced by the fact that technical indicators have been gaining positive traction on the daily chart and eased from the overbought zone on hourly charts. Hence, a subsequent move beyond the overnight swing highs, around the 0.8710 region, looks a distinct possibility.

From current levels, the next relevant hurdle is pegged near the 38.2% Fibo. level, around the 0.8740-50 supply zone. Some follow-through buying 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.

On the flip side, the 0.8670-60 region now seems to have emerged as immediate support ahead of the 23.6% Fibo. level, around the 0.8645-40 zone. Any further pullback might still be seen as a buying opportunity and remain limited near the 0.8600 mark, or the falling wedge resistance breakpoint.

EUR/GBP 4-hour chart

Technical levels to watch

EUR/GBP

Overview
Today last price	0.8698
Today Daily Change	0.0009
Today Daily Change %	0.10
Today daily open	0.8689

Trends
Daily SMA20	0.8587
Daily SMA50	0.8635
Daily SMA100	0.8807
Daily SMA200	0.8924

Levels
Previous Daily High	0.8712
Previous Daily Low	0.8641
Previous Weekly High	0.8697
Previous Weekly Low	0.8472
Previous Monthly High	0.8674
Previous Monthly Low	0.8503
Daily Fibonacci 38.2%	0.8685
Daily Fibonacci 61.8%	0.8668
Daily Pivot Point S1	0.8649
Daily Pivot Point S2	0.861
Daily Pivot Point S3	0.8578
Daily Pivot Point R1	0.872
Daily Pivot Point R2	0.8751
Daily Pivot Point R3	0.8791

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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