The EUR/GBP marked a low on the year at 0.7014 and and has since rebounded. Let’s take a look at the charts to assess the technical development.
The 4H chart shows the bullish correction now taking another step as price breaks above the 200-period SMA and last week’s 0.7292 high. The RSI has already tagged above 70 to show bullish momentum, and it reflects maintenance of that momentum to start this week.
In the very short-term we should respect the bullish momentum and expect further upside. However, we know that EUR/GBP is bearish in the medium-term. Therefore, we should be mindful of key resistance factors. In the 4H chart we can see the even though there is no specific pivot at 0.74, price action was sticky around it treating the area around it as support and resistance back in the end of January, beginning of February.
In the daily chart, the 50-day SMA resides just under 0.74. If price approaches 0.74, and the daily RSI is around 60, we should look out for a bearish attempt at least back towards the 0.7150 support/resistance area, if not the 0.7014 low with bearish continuation risk.
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