EUR/GBP continues to trade above the upwards moving trendline, taken from the low of the 15th of June. As long as the trendline remains intact, we will aim for another push higher, but if it gets broken and the pair closes below it, then this could through us to the side-lines.
Because EUR/GBP is still slightly above the aforementioned upside trendline, we could see a drop to it, where the bulls could jump in and try to drive the pair higher. A good potential resistance area to keep an eye on is around the 0.8945 level, which was yesterday’s high. If that level gets broken, then this could open the path towards the next potential resistance zone at 0.8992, near the high of the of the 10th of August. This is where the rate could stall for a while until the bulls and the bears decide on who takes the driver’s seat from there.
On the downside, if a break of the previously mentioned upwards moving trendline eventually happens and we see EUR/GBP closing below it, this could open the door to the next good area of support at 0.8883 hurdle, marked by the low of the 5th of August. If that hurdle is not able to withhold the fall, then the pair could make its way towards the 0.8865 barrier, which was seen as a strong support on the 26th of July.
Looking at our oscillators, we see that the currently below 50 but is running almost flat. The MACD is below the zero line but sitting on its trigger line, showing signs of bottoming. These indicators suggest that the downside momentum may be running out of steam and that a rebound from near the aforementioned trendline may be looming.
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