EUR/GBP Price Analysis: Probing the 50-DMA at 0.8500 after a three-day rally
- EUR/GBP is set to finish the week with gains of 0.49%.
- Euro buyers stepped in around weekly lows below 0.8400, under the 20, 50, and 200-DMAs.
- A daily close above 0.8500 might open the door for a re-test of 0.8600.
The EUR/GBP extended its rally to three consecutive days, breaking on its way north the 100-day EMA, though it struggled to get above the 50-day EMA after reaching a daily high at 0.8511. At the time of writing, the EUR/GBP is trading at 0.8493, above its opening price by 0.50%.
EUR/GBP Price Analysis: Technical outlook
From a daily chart perspective, the EUR/GBP shifted from neutral-downwards to neutral. In the last week, broad euro weakness tumbled the pair from current price levels towards 0.8400. However, EUR buyers stepped in around weekly lows at around 0.8386 and sent the cross-currency rallying toward the 0.8500 figure.
Worth noting that during the last three days, the EUR/GBP rally sparked a jump in the Relative Strength Index (RSI), a sign that momentum is on the side of buyers. Additionally, the break of a one-month-old downslope trendline around 0.8450 exacerbated a rally towards today’s high at 0.8511. So a break above the 0.8500 mark is on the cards.
Therefore, the EUR/GBP first resistance will be the confluence of the 50-day EMA at 0.8499 and the 0.9500 figure. Once cleared, the next stop will be Friday’s high at 0.8511, which, once broken, would aim towards a two-month-old downslope trendline around 0.8550 before climbing to the July 21 high at 0.8584.
EUR/GBP Daily chart
EUR/GBP Key Technical Levels