Technical Analysis – EURGBP recoups weekly losses; stays below key barrier
EURGBP drifted sharply higher on Thursday after securing another strong foothold around the key ascending trendline that connects the lows from last August and December 2022. The 50% Fibonacci retracement of the 0.8201-0.9249 uptrend cemented that floor too.
The pair has almost recovered from last week’s freefall, but it keeps trading around the key resistance region of 0.8825-0.8850, while it has also been fluctuating within a descending channel over the past six weeks.
Therefore, traders may preserve some caution as the momentum indicators are currently witnessing. Specifically, the RSI has not successfully climbed above its 50 neutral mark, while the MACD has yet to crawl above its red signal line. On the other hand, the Stochastic oscillator avoided a pullback below its 20 oversold level, flagging persisting upside pressures in the coming sessions.
If the pair breaks above the channel at 0.8890, it may face some immediate resistance near the 0.8925 barrier before pushing towards the 23.6% Fibonacci level of 0.9000. A successful move higher could boost upside pressures towards 0.9065, where the pair peaked on September 28.
On the downside, sellers will wait for a close below the trendline and the 50% Fibonacci mark of 0.8725 before they test the channel's lower boundary and the 200-day simple moving average (SMA) within the 0.8700-0.8680 zone. Should the bearish sentiment strengthen below the latter, the decline could extend towards the 0.8570-0.8535 support zone. In a nutshell, EURGBP has not entered a bullish area yet despite today’s advance. For that to happen, the pair will need a decisive move above 0.8890-0.8925.Related Assets
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