Technical Analysis – EURGBP ticks up in ascending channel

Melina Deltas, XM Investment Research Desk

EURGBP has been in a slightly bullish channel over the last three months, rebounding on the 20-day simple moving average (SMA).  The RSI is heading higher above the neutral threshold of 50, while the MACD is strengthening its momentum near its trigger line, marginally above the zero line. The 20- and 40-day simple moving averages (SMAs) are moving marginally higher as well, along with the Ichimoku lines.

Immediate resistance is coming from the 0.9180 barrier, taken from the latest high, before stepping higher towards the 0.9390 hurdle, identified on March 23. Above that, the market could hit the eleven-year of 0.9500, being the top from March 19.

In the event of a downside reversal, EURGBP could meet first the 20-day SMA at 0.9042 and then the 40-day SMA at 0.9000, slightly below the upper surface of the cloud. Below that, the pair may break the ascending channel, flirting with the 0.8930 support, which overlaps with the 200-day SMA.

In the medium term, the bullish outlook remains intact, with the price standing above the moving averages. However, should prices decline below 0.8930, this would risk shifting the medium-term picture to a more neutral one.