The pound swings higher likely due to profit-taking, following a sharp sell-off. The euro’s surge has hit a speed bump at July’s high (0.8660).
An overbought RSI and its bearish divergence have prompted short-term buyers to take chips off the table. The support-turned-resistance at 0.8620 capped a rebound.
The upside bias is still valid as long as the pair is above 0.8525, the base of the latest rally. The bulls may trigger an extended rally if they can lift 0.8625. Failing that, the price may drop to 0.8485.
