- A 50% Fibo retracement at 0.8463 is acting as a major barricade for the cross.
- An establishment in a bullish range (60.00-80.00) by the RSI (14) indicates bullish momentum.
- The 200-EMA is still untouched, however, the upside momentum warrants a break of the same.
The EUR/GBP pair is displaying wild swings as investors are reshuffling their positions ahead of the European session. The cross has remained in the 0.8443-0.8459 range after a modest rally from a low of 0.8410 recorded on Monday.
After a decent rally, the shared currency bulls are struggling to overstep the 50% Fibonacci retracement (which is placed from July 21 high at 0.8586 to the August 2 low at 0.8340) at 0.8463.
The cross has firmly established above the 50-period Exponential Moving Average (EMA) at 0.8422, which indicates that the short-term bull trend is intact. However, the 200-EMA is still above the asset prices at around 0.8467 and may get violated sooner.
Meanwhile, the Relative Strength Index (RSI) (14) has shifted into the bullish range of 60.00-80.00,w which indicates that upside momentum is intact.
A confident violation of the 50% Fibo retracement at 0.8463 will strengthen the shared currency bulls further and will drive the asset towards July 22 low at 0.8487, followed by the psychological resistance at 0.8500.
On the flip side, the pound bulls could drag the cross towards July 31 high at 0.8400 and August 1 low at 0.8352 if the asset drops below July 12 low at 0.8433.
EUR/GBP four-hour chart