- EURGBP moves further away from the upper end of a prior range
- Both the MACD and the RSI indicate positive momentum
- These signs paint a cautiously positive short-term picture
EURGBP bulls have gained the upper hand this week, distancing themselves from the key barrier of 0.8700, fractionally above which the pair has been oscillating since October 20. That zone acted as the upper bound of the sideways range that had been containing most of the price action since May, and thus, the fact that the price is trading above it paints a cautiously positive picture.
Both the MACD and the RSI are detecting upside momentum, corroborating the notion that the bulls will likely stay in the driver’s seat for a while longer. The former runs above both its zero and trigger lines, while the latter lies near its 70 line, pointing up.
If the bulls are willing to continue pushing higher, they may eventually reach the 0.8875 territory, which provided strong resistance on several occasions between December and April. If they are strong enough to overcome it, then the advance may continue towards the peak of February 3 at 0.8975.
On the downside, a slide below 0.8700 and the upside support line drawn from the low of August 23 could confirm the pair’s return within the aforementioned sideways range and turn the outlook back to neutral. The bears may get encouraged to aim for the 0.8615 level, the break of which could carry extensions towards the lower end of the range at around 0.8520.
To recap, EURGBP has been rising this week, already above the key resistance zone of 0.8700, which was the upper boundary of a prior sideways range. From a technical standpoint, this paints a cautiously positive picture, adding to the likelihood of some further advances.