EUR/GBP Price Analysis: Subdued around 0.8710s, as a bearish-harami surfaces

The Euro prolonged its gains against the Pound Sterling amidst a volatile trading session that witnessed both currencies featuring reports that inflation in the Eurozone and the UK remains higher, meaning that further central bank actions are needed to control stubbornly elevated inflation. From a technical point of view, the EUR/GBP is trading above its opening price by 0.16%, hoovering around 0.8710s, trapped between the 20 and the 50-day Exponential Moving Averages (EMAs).

EUR/GBP Price Forecast

The EUR/GBP daily chart illustrates the pair as neutral-to-upward biased, though contained within last Tuesday’s price action (0.8633-0.8731). If the EUR/GBP breaks the October 18 high of 0.8731, that could pave the way for further gains, exposing the 20-day EMA at 0.8775. Otherwise, a bearish-harami candle pattern would emerge, warranting downside action in the pair. If that scenario plays out, EUR/GBP’s key support areas lie at the 50-day EMA at 0.8656, followed by the confluence of the October 17 low and the 50-day EMA around 0.8656/57.

EUR/GBP Daily Chart

Short term, the EUR/GBP one-hour chart portrays the pair as neutral, consolidated in the 0.8700-0.8723 area. On top, the 200-EMA at 0.8723 would be a difficult hurdle to surpass. Once cleared, it could send the EUR/GBP towards the R1 daily pivot at 0.8745, followed by the R2 pivot point at 0.8787, ahead of the 0.8800 figure.

On the flip side, the EUR/GBP failure to crack 0.8731, the weekly high, would exacerbate a fall toward fresh weekly lows. Hence, the EUR/GBP first support will be the 20-EMA at 0.8702, followed by the confluence of the daily pivot and the 50-EMA at 0.8690. Break below will expose the 100-EMA at 0.8673, followed by the S1 pivot level at 0.8650.

EUR/GBP Hourly Chart