EUR/GBP Price Analysis: Stays below 0.8600 despite an upbeat mood and a weaker GBP
- The shared currency finished the week with decent gains of 0.21%.
- Sentiment remains optimistic, despite recession fears threatening.
- EUR/GBP Price Analysis: Remains upwards but struggling at 0.8600 might open the door for selling pressure.
The EUR/GBP accelerates for the fourth day out of five in the week, set to finish with decent gains of 0.21%. On Friday, the cross-currency pair slumped towards its daily low at 0.8561, then snapped back and rose towards 0.8600. At 0.8595, the EUR/GBP retained the control and extended its weekly rally to two consecutive weeks.
Wall Street is set to finish the week on an upbeat tone, registering gains in the range of 2.34% and 2.73%. US economic slowdown, alongside lower inflation expectations, revealed at the University of Michigan June’s Consumer sentiment report tempered expectations for the Federal Reserve hike plan.
Reflection of the abovementioned are money market futures STIRs, showing that traders expect the Federal funds rate (FFR) to end around 3.50%, aligned with the St. Louis Fed President James Bullard’s forecast.
Friday’s EUR/GBP price action shows that the cross opened near 0.8580s and dipped towards 0.8561 before bouncing off those lows, settling around 0.8590. nevertheless, the lack of a EUR/GBP bullish impulse kept the pair below the 0.8600 threshold.
EUR/GBP Price Analysis: Technical outlook
Daily chart
EUR/GBP price action depicts the pair as upward biased. However, buyers unable to break above the 0.8650 kept the cross-currency range-bound in the 0.8550-0.8650 area, meaning consolidation lies ahead. Further confirmation of that is the Relative Strength Index (RSI) At 55.36, in positive territory but with an almost horizontal slope.
Therefore, the EUR/GBP top of the range is 0.8650. A breach of the latter would expose the 0.8700 figure. Once cleared, the next ceiling level would be the YTD high at 0.8720, followed by 0.8800.
On the flip side, the EUR/GBP first support is the 20-EMA at 0.5857. Break below would expose June’s 16 low at 0.8511, followed by the 50-EMA at 0.8493.
EUR/GBP Key Technical Levels