Technical Analysis – EURGBP short-term bias weaker, nearby resistance keeps pressuring

Technical Analysis – EURGBP short-term bias weaker, nearby resistance keeps pressuring

Technical Analysis – EURGBP short-term bias weaker, nearby resistance keeps pressuring

Christina Parthenidou, XM Investment Research Desk

EURGBP is trading in a tight narrow range of 0.8574-0.8676 which is part of the three-month-old bear trend.

The soft upward move in the RSI and the MACD reflects a weaker short-term bearish bias but a closing price above the 0.8676 resistance could attract some buying interest towards 0.8753, which is the 23.6% Fibonacci retracement of the downleg from 0.9324 to 0.8574. Slightly higher, a breach of the 0.8800-0.8860 noisy area, where the 38.2% Fibonacci and the longer-term SMAs are placed, could question the strength of the downtrend, with the spotlight turning next to the 50% Fibonacci of 0.8950.

On the other hand, a drop under 0.8574 could initially pause around 0.8520 and then near the March trough of 0.8474, while beneath the latter the 0.8400 round-level could also prove a tough obstacle.

Meanwhile, in the medium-term picture, EURGBP continues to follow a negative direction and only a rally above 0.8900 could eliminate the bearish sentiment. However, with the 50- and the 200-day SMAs preparing for a bearish cross, such a move could come later than sooner.

Summarizing, EURGBP bears look to be losing strength in the short-term though only a decisive rebound above 0.8676 could confirm that, while in the medium-term, a steeper upturn above 0.8900 is required to return neutrality. 

 


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