- EUR/GBP was seen consolidating in a range below the 0.9000 round-figure mark.
- The set-up favours bulls, though warrants caution before placing aggressive bets.
- Any further slide might still be seen as a buying opportunity and remain limited.
The EUR/GBP cross lacked any firm directional bias on Friday and seesawed between tepid gains/minor losses through the mid-European session.
The cross on Thursday struggled to capitalize on its early uptick to near two-week tops. and once again failed to find acceptance above the key 0.9000 psychological mark. The subsequent pullback reinforced a heavy supply zone near the 0.9015 region, which should now act as a key pivotal point for short-term traders.
Meanwhile, technical indicators maintained their bullish bias on 4-hourly/daily charts, albeit have been losing positive momentum on the 1-hourly chart. The near-term bias – though seems tilted in favour of bullish traders – warrant some caution before placing any aggressive directional bets amid absent relevant catalyst.
Hence, it will be prudent to wait for a sustained strength beyond the 0.9000 mark, above which bulls are likely to aim to test late-May swing highs, around the 0.9055 region. Some follow-through buying could assist the cross to extend the momentum further and head towards reclaiming the 0.9100 round-figure mark.
On the flip side, immediate support is pegged near the 0.8930 level, which if broken might turn the cross vulnerable to accelerate the slide further towards the 0.8900 mark. Any subsequent slide might still be seen as a buying opportunity and help limit the fall near the 0.8865 horizontal resistance breakpoint, now turned support.
Failure to defend the mentioned support will mark a near-term bearish breakdown and set the stage for a slide back towards the 0.8810-0.8800 region. The downwards trajectory could further get extended towards the 0.8700 mark with some intermediate support near the 0.8740 area.
EUR/GBP 4-hourly chart
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Technical levels to watch
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