EUR/GBP Price Forecast: EUR vs GBP May Rally Further as Support Holds
EUR/GBP Technical Analysis
EUR/GBP Price – From Bearish to Bullish
On May 4, EUR/GBP rallied to a near two-week high at 0.8814. However, the price retreated after then settled below the 0.8800 handle. On Friday, the weekly candlestick closed in the red with a 0.6% loss. This week, the pair has rallied and recovered last week’s losses.
Alongside that, the Relative Strength Index (RSI) rose from 50 to 58, highlighting that bulls were in charge.
EUR/GBP DAILY PRICE CHART (Aug 1, 2018 – May 14, 2020) Zoomed Out
EUR/GBP DAILY PRICE CHART (Jan 27 – May 14, 2020) Zoomed In
Looking at the daily chart, on April 30 EUR/GBP printed its lowest level in over seven weeks at 0.8671 then reversed higher. On Tuesday, the market pushed to the current trading zone of 0.8832 – 0.8912. Yet, the price failed to overtake the 50-day average reflecting a weaker bullish sentiment.
Another close above the low end of the zone could encourage bulls to rally EURGBP towards the high end of the zone. A Further close above that level may extend this rally towards 0.9015. In that scenario, the weekly resistance levels marked on the chart (zoomed in ) should be considered.
A close below the low end of the zone may end the bullish move and reverse the pair’s direction towards 0.8637. A further close below that level could send EURGBP even lower towards 0.8498. That said, the daily and weekly support levels underscored on the chart should be kept in focus.
EUR/GBP FOUR HOUR PRICE CHART (April 16 – May 14, 2020)
Based on the analysis of the four- hour chart, on May 5 EUR/GBP corrected its downtrend and created a higher low at 0.8690. Later on, the price started an uptrend creating higher highs with higher lows. A break yesterday’s low printed on the chart would correct the bullish momentum.
Another break below 0.8774 would be considered a bearish signal and could send EURGBP towards 0.8671. Although, the daily support level underlined on the chart should be watched closely. On the Other hand, any break above 0.8939 could trigger a rally towards 0.8996. Nonetheless, the weekly resistance level marked on the chart should be monitored.
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, Market Analyst
Please feel free to contact me on Twitter: @Malkudsi
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.