EUR/GBP Lacks Bullish Mood; Support at 0.8700
2022.11.18 08:57
has been in a consolidation phase over the past two weeks, maintaining a foothold above the 0.8700 level and the support trendline drawn from the August low of 0.8338.
The momentum indicators currently reflect a neutral-to-bearish bias. The RSI and the MACD have been gradually diminishing over the past week, with the former looking for a break below its 50 neutral mark and the latter flirting with its red signal line. Meanwhile, the falling stochastics have yet to enter the oversold territory below 20, suggesting that bearish pressures may persist in the short term.
Still, as long as the price keeps trading within the bullish upper Bollinger area, there is potential for an upside reversal to test the nearby 0.8820 resistance territory. A decisive close above October’s high of 0.8865 could produce another leg up to 0.8925. Even higher, the pair will attempt to re-enter the 0.9000 territory with scope to reach the March ascending trendline currently seen near 0.9150.
On the downside, a step below 0.8700 could confirm additional losses towards the lower ascending trendline at 0.8630. If that floor cracks too, the pair may revisit October’s low of 0.8570 before meeting the 200-day simple moving average (SMA) at 0.8530. Moving lower, the focus will turn to the long-term 0.8470 familiar constraining zone.
In brief, EURGBP is showing no appetite for improvement, though it may postpone selling activities if it stands firm above 0.8700.
