EUR/GBP Price Analysis:
With so many technical analysis techniques at play on EUR/GBP[1], going through our DailyFX Educational[2] content can greatly enhance your trading knowledge
EUR/GBP EDGES HIGHER DESPITE UK INFLATION DATA
With UK inflation[3] figures coming in higher than forecasted, the uptick in consumer spending and demand for goods has been well received amongst retail and service industries. This comes after an easing of lockdown restrictions which reflected in a variety of areas with clothing, petrol and packaged holidays being highlighted. The higher than expected inflation data did not assist Sterling as the Euro[4] gained roughly 0.5% against the pound since the announcement.
EUR/GBP TECHNICAL ANALYSIS
EUR/GBP: Weekly Chart
Chart prepared by Warren Venketas[5], IG
The weekly chart above shows a multi-year range bound movement beginning in July 2016. The support and resistance zones (blue) currently hold from the 0.8238 (38.2% Fibonacci) level and 0.9514 level respectively – Fibonacci taken from April 2000 low to December 2008 high.
Since mid-May 2020, price action[6] has been ‘dancing’ around the 0.9000 psychological level[7] with no real conviction to push above or below. This could be an opportunity for traders to exploit large movements either side of this level.
EUR/GBP: Daily Chart
Chart prepared by Warren Venketas[8], IG
Price uncertainty on the daily chart above shows in both the 20- and 50-day Moving Averages (MA)[9] and Relative Strength Index (RSI)[10] correspondingly. Recent consolidation around the MA’s may be reaching it’s breaking point with the 20-day MA crossing below the 50-day MA which is suggestive of a near term bearish move. Bears will look for the recent swing low 0.8938 as initial
