EUR/GBP Price Analysis: Stays below 0.8600 despite an upbeat mood and a weaker GBP

The shared currency finished the week with decent gains of 0.21%.
Sentiment remains optimistic, despite recession fears threatening.
EUR/GBP Price Analysis: Remains upwards but struggling at 0.8600 might open the door for selling pressure.

Christian Borjon Valencia FXStreet

The EUR/GBP accelerates for the fourth day out of five in the week, set to finish with decent gains of 0.21%. On Friday, the cross-currency pair slumped towards its daily low at 0.8561, then snapped back and rose towards 0.8600. At 0.8595, the EUR/GBP retained the control and extended its weekly rally to two consecutive weeks.

Wall Street is set to finish the week on an upbeat tone, registering gains in the range of 2.34% and 2.73%. US economic slowdown, alongside lower inflation expectations, revealed at the University of Michigan June’s Consumer sentiment report tempered expectations for the Federal Reserve hike plan.

Reflection of the abovementioned are money market futures STIRs, showing that traders expect the Federal funds rate (FFR) to end around 3.50%, aligned with the St. Louis Fed President James Bullard’s forecast.

Friday’s EUR/GBP price action shows that the cross opened near 0.8580s and dipped towards 0.8561 before bouncing off those lows, settling around 0.8590. nevertheless, the lack of a EUR/GBP bullish impulse kept the pair below the 0.8600 threshold.

EUR/GBP Price Analysis: Technical outlook

Daily chart

EUR/GBP price action depicts the pair as upward biased. However, buyers unable to break above the 0.8650 kept the cross-currency range-bound in the 0.8550-0.8650 area, meaning consolidation lies ahead. Further confirmation of that is the Relative Strength Index (RSI) At 55.36, in positive territory but with an almost horizontal slope.

Therefore, the EUR/GBP top of the range is 0.8650. A breach of the latter would expose the 0.8700 figure. Once cleared, the next ceiling level would be the YTD high at 0.8720, followed by 0.8800.

On the flip side, the EUR/GBP first support is the 20-EMA at 0.5857. Break below would expose June’s 16 low at 0.8511, followed by the 50-EMA at 0.8493.

EUR/GBP Key Technical Levels

EUR/GBP

Overview
Today last price	0.8595
Today Daily Change	0.0010
Today Daily Change %	0.12
Today daily open	0.8585

Trends
Daily SMA20	0.8557
Daily SMA50	0.8491
Daily SMA100	0.8429
Daily SMA200	0.8444

Levels
Previous Daily High	0.8641
Previous Daily Low	0.8574
Previous Weekly High	0.8721
Previous Weekly Low	0.8512
Previous Monthly High	0.8619
Previous Monthly Low	0.8367
Daily Fibonacci 38.2%	0.86
Daily Fibonacci 61.8%	0.8615
Daily Pivot Point S1	0.8559
Daily Pivot Point S2	0.8533
Daily Pivot Point S3	0.8492
Daily Pivot Point R1	0.8626
Daily Pivot Point R2	0.8667
Daily Pivot Point R3	0.8694

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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