EUR/GBP Technical Outlook
EUR/GBP – Bulls Ease Up
On Friday, EUR/GBP soared to 0.9052 -its highest level in over six months. The market closed the weekly candlestick in the green with 4.5% gain. This week, the price resumed bullish price action and printed its highest level in eleven years at 0.9500 then declined after as bulls seemed to cut back.
Today, the Relative Strength Index (RSI) abandoned overbought territory highlighting a slowing down uptrend momentum.
EUR/GBP DAILY PRICE CHART (FEb 1 – Mar 20, 2020)
Looking at the daily chart, we noticed that on Friday EUR/GBP rallied to a higher trading zone 0.9015 – 0.9500. Yesterday, the price rebounded from the high end of the zone eyeing a test of the low end of it.
Thus, a close below the low end of the zone signal a possible price fall towards 0.8832. Further close below that level could extend this move towards 0.8687. In that scenario, the daily and weekly support levels underlined on the chart should be kept in focus, as some traders might exit/join the market around these points.
In turn, any failure in closing below the low end may encourage EURGBP bulls to push towards the high end of the zone. Further close above that levels opens the door for more bullishness towards 0.9803. That said, the psychological resistance levels underscored on the chart would be worth monitoring.
EUR/GBP FOUR HOUR PRICE CHART (Mar 10 - Mar 20, 2020)
From the four- hour chart, we noticed that today EUR/GBP has broken below the uptrend line originated from the March 11 low at 0.8715 and tested trading blow 0.9000 handle.
Thus, another break below 08941 could send EURGBP even lower towards 0.8852. Although, the daily resistance level underlined on the chart should be monitored. On the other hand, any break above 0.9339 may lead the market to retest 0.9500 handle. Nevertheless, the daily resistance printed on the chart should be watched closely.
See the chart to figure out more about key technical levels the price would encounter in a further bullish/ bearish scenario.
Written By: Mahmoud Alkudsi
Please feel free to contact me on Twitter: @Malkudsi
