- EURGBP posts a higher high to climb to a one-month peak
- Short-term bias increasingly bullish according to technical indicators
- But long-term descending trendline could curb advances
EURGBP is scaling a higher high on Wednesday, climbing above the 100-day simple moving average (SMA), having already reclaimed the 20- and 50-day SMAs. The momentum indicators point to further gains in the near term.
The MACD just turned positive and is increasing its distance above its red signal line. The RSI is edging higher above 50. The stochastic oscillator is rising too but it has now entered the overbought territory, suggesting some danger that the upside momentum runs out of steam.
The price is facing immediate resistance at the long-term descending trendline as well as the 100-day SMA in the 0.8615 region. A break higher would shift the focus to the August peak of 0.8668, while not much higher are the 38.2% Fibonacci retracement of February – August downtrend at 0.8678 and the July top of 0.8700. However, the real test for a more sustainable rebound is likely to be found slightly higher at the 200-day SMA at 0.8710.
If the rebound falters, the focus would quickly shift to the 50- and 20-day SMA at 0.8580 and 0.8566, respectively. Breaching these, the pair could revisit August’s one-year low of 0.8492, after which, the next stop would be the previously proven support area around 0.8385.
To sum up, EURGBP needs to tackle the immediate resistance hurdle of the descending trendline to be able to stretch the rebound that is underway. Failing to do so could spark a pullback, weakening the short-term positive picture.
, having already reclaimed the 20- and 50-day SMAs. The momentum indicators point to further gains in the near term.){kind=link}