EUR/GBP Price Analysis: Unable to break 20 DMA, pulls back towards 0.8745

  • EUR/GBP bounced off the 50 day EMA as buyers eye 0.8800.
  • Favorable political news out of the UK briefly underpinned the pound sterling, though it retreated as the euphoria faded.
  • In the short term, the EUR/GBP could correct towards 0.8700 before resuming its uptrend.

The EUR/GBP It retakes the 50 day EMA and is moving steadily towards 0.8750, although it is facing resistance from the 20 day EMA around 0.8751, while heading towards 0.8800, amid some political stability in the UK. The news that Rishi Sunak is the new head of the Conservative Party and therefore the new Prime Minister calmed the markets, although the British pound weakened. At time of writing, EUR/GBP is trading around 0.8746, above its opening price, up 0.27%.

EUR/GBP Price Forecast: Technical Outlook

From the point of view of the daily chart, the EUR/GBP continues to have a neutral bias. However, once it breaks above the 20-day EMA, it could send the pair looking towards 0.8800, before the next supply zone, the 12th Oct high at 0.8866, followed by the 0.8900 figure. It is noteworthy that the slope of the Relative Strength Index (RSI) moved up, which means that the buyers are gaining momentum, preparing to attack 0.8800.

In the short term, the EUR/GBP hourly chart shows that the pair has gapped lower after the positive news from the UK, opening around 0.8660. The Euro later recovered from its earlier losses and retraced the 0.8700 mark as EUR/GBP headed towards the daily high of 0.8763 before the pair pulled back to current exchange rates in sympathy with the EUR/GBP Index. Relative Strength (RSI), which pointed to the downside.

Given the background, the first support for the EUR/GBP would be the confluence of the 50 and 100 EMAs around 0.8719/13. A break below will expose the 20 EMA at 0.8703, followed by the 200 EMA at 0.8697, before the S1 daily pivot at 0.8693.

EUR/GBP Key Technical Levels

EUR/GBP

Overview
last price today 0.8746
Today I change daily 0.0015
Today’s daily variation in % 0.17
Daily opening today 0.8731
Trends
daily SMA20 0.8767
daily SMA50 0.867
daily SMA100 0.8589
daily SMA200 0.8494
levels
Previous daily high 0.8781
Previous Daily Low 0.8705
Previous Weekly High 0.8781
Previous Weekly Low 0.8578
Previous Monthly High 0.9254
Previous Monthly Low 0.8566
Daily Fibonacci of 38.2% 0.8752
Daily Fibonacci of 61.8% 0.8734
Daily Pivot Point S1 0.8697
Daily Pivot Point S2 0.8664
Daily Pivot Point S3 0.8622
Daily Pivot Point R1 0.8773
Daily Pivot Point R2 0.8814
Daily Pivot Point R3 0.8848

Source: Fx Street

You may also like