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EURGBP Maintains Bullish Bias Despite Minor Pull Back

EURGBP maintains a bullish bias despite the minor correction from the July 21 high of 0.8994. The uptrend that took place from the 0.8300 handle from April 18 is still intact.

Strong support was found at 0.8760. It was previously a resistance level which was broken on June 9 and consequently turned to support, which was tested several times until July 17 when the market rallied to 0.8994.

There was a bullish crossover of the 50-day moving average with the 200-day MA on June 28. This gives a technically bullish picture for EURGBP but strong resistance could limit upside moves at the October 2016 high of 0.9261. This may provide a challenge for the market as it is the highest level since 2009.

Meanwhile, RSI is in bullish territory above 50, although it appears to have lost momentum. This could suggest some consolidation in the market in the near term, as long as support at 0.8760 holds. A break below this would target a support zone between 0.8625 to 0.8635, which is defined by the 200-day MA and the June 9 low. A further decline would open the way towards the key 0.8400 area and April 18 low of 0.8312.

In the bigger picture, the current pull back from 0.8994 could be seen as a corrective move of the recent uptrend. There are no clear signs of a reversal in the trend yet and EURGBP maintains a bullish outlook as long as it is located above 0.8760.

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