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EUR/GBP Pair Remains Bullish Above 0.8600

July 5, 2022

Talking Points:

  • Within a 13-day-old bullish channel, EUR/GBP remains slightly bid.
  • The 200-day simple moving average (SMA) reinforces support at 0.8560, and a stable relative strength index (RSI) adds to the bullish bias.
  • To defend the yearly high, a pullback from 0.8680 seems necessary.

During today’s Asian trading session, bids for EUR/GBP increase in an effort to recover from the week’s opening losses at 0.8615. The cross-currency pair continues to move inside a two-week-long ascending trend channel.

The pair’s continued trade above the 200-day SMA and the higher RSI support the bullish bias.

To reject the bullish channel formation by passing the 0.8685 barrier, the rising momentum must first receive confirmation from the most recent swing high around 0.8680.

In doing so, the Bulls could then aim for the recently reached multi-month high of 0.8720 for the EUR/GBP pair.

Currently a pullback is difficult to achieve until prices stay above the 0.8560 support confluence, which is formed by the 200-day SMA and lower line of the aforementioned channel.

If EUR/GBP falls below 0.8560, it is possible that it will retrace towards a six-week-old horizontal support zone between 0.8485-80.

Overall, EUR/GBP maintains its upward trend as it approaches a retest of the multi-month high set in June, around 0.8720. Though any additional upside seems unlikely.

EUR/GBP Four-Hour Chart:

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