- EUR/GBP's daily chart shows a death cross – a bearish but lagging indicator.
- UK's PM Johnson is leading in pre-election polls. That could bode well for GBP.
EUR/GBP could soon pick up a bid as a lagging indicator has turned bearish for the first time since February.
The so-called death cross seen on the daily chart, which represents a bearish crossover of the 50- and 200-day moving averages, is a big-time lagging indicator, as MA studies are based on past data.
More often than not, the death cross traps sellers on the wrong side of the market. That said, Sterling is seen rising if the UK Prime Minister's Johnson's Conservative Party gets a majority in December elections. Currently, Johnson is leading in polls. Pound, therefore, could find bids, keeping the EUR/GBP under pressure.
With technicals and macro giving conflicting signals, seasoned traders may prefer to wait on the sidelines until a clear directional bias emerges. The pair has been restricted largely to a narrow range of 0.8575 to 0.8675 since Oct. 17.
Daily chart
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Trend: Cautiously bullish (due to death cross)
Technical levels
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