Technical Analysis – EURGBP to hold uptrend in near term; 20-SMA key support
Posted on July 23, 2019 at 7:45 am GMT
Christina Parthenidou, XM Investment Research Desk
EURGBP has been in the green zone for the past twelve weeks, topping its rally at an almost six-month high of 0.9050 last week.
The 20-day simple moving average (SMA) has played a key role in rejecting bearish corrections and therefore should be closely watched if negative momentum resumes. The fast Stochastics, however, are currently approaching the 20 oversold mark, while the RSI and the red Tenkan-sen are in consolidation, all flagging an overall neutral-to-positive bias for the short-term.
Should the 20-day SMA assist the bulls once again, the price may retest key resistance within the 0.9032-0.9060 area. Crawling even higher, the pair would have to clear the 0.91 mark to challenge a former strong barrier around 0.9150.
If the bears manage to overcome the 20-day SMA currently at 0.8975 and break below Friday’s trough of 0.8955, traders could next look for support near 0.8917, the 23.6% Fibonacci retracement level of the upleg from 0.8489 to 0.9050. Further down and under the 50-day SMA. the way would open towards the 0.8875 mark and the 38.2% Fibonacci of 0.8836.
Meanwhile, in the medium-term picture, the golden cross between the 50- and the 200-day SMA keeps hopes for a brighter outlook alive.
In brief, the technical signals suggest a neutral-to-positive trading in the short-term and a bullish one for the medium-term.