Yesterday’s Brexit events also had their effect on EUR/GBP. The pair spiked higher, breaking the 0.8860 resistance line and positioning itself for another potential move up. Overall, EUR/GBP is still within the falling channel, which started around the 27th of September last year and remains intact till the present day. That said, it looks like the bulls are confident to try and reach the upper bound of that channel in order to see if they could give another push to break out of the channel. This move higher is also supported by the upside line, taken from the low of the 17th of April.
For now, we remain positive on the short-term outlook for EUR/GBP, as it could eventually push towards the 0.8900 level, marked by yesterday’s peak. Slightly above that is the upper bound of the falling channel, which could stall the rally for a bit, until the bulls and the bears decide who will take control from there.
The RSI and the MACD are also in support of the upside. The first is above 50 and is slightly tilted to the upside. The second is above zero and its trigger line. This makes us believe that there is good chance for the pair to make its way higher, as both indicators are detecting upside momentum.
On the downside, a move back below the 0.8860 level could put a bit of pressure on EUR/GBP, which could lead to a decline towards another good area of support at around 0.8828. If, at this point, the bears become the main driver force behind the pair, we could see it sliding to the 0.8800 zone, marked by the lows seen on the 4th of July. Slightly below that lies the 0.8780 hurdle, marked by the low of the 25th of June.
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