EUR/GBP Price Analysis: Fresh upside seems possible on Flag breakout

• EUR/GBP will deliver a Flag breakout after surpassing the 0.8870 resistance.
• Advancing 200-EMA signals that the long-term trend is bullish.
• A 40.00-60.00 range oscillation by the RSI (14) conveys the unavailability of a potential trigger.

The EUR/GBP pair is displaying topsy-turvy moves below the crucial hurdle of 0.8840 in the Asian session. The cross trades directionless amid an absence of a potential trigger. Meanwhile, the European Central Bank (ECB) is expected to cease its policy tightening approach as ECB governing council member Mario Centeno cited that Eurozone inflation may face stiff resistance in January and February but will start falling from March.

On a four-hour scale, EUR/GBP is forming a Bullish Flag chart pattern that indicates a sheer consolidation, which is followed by a breakout in the same. Usually, the consolidation phase of the chart pattern serves as an inventory adjustment in which those participants initiate longs, which prefer to enter an auction after the establishment of a bullish bias.

The 50-period Exponential Moving Average (EMA) near 0.8820 has turned sideways, which indicates a consolidation ahead. While the 200-EMA at 0.8755 is still advancing, this signals that the long-term trend is bullish.

Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range. It conveys the unavailability of a potential trigger for a conviction move.

A break above January 6 high at 0.8871 will drive the asset towards the round-level resistance at 0.8900, followed by the September 29 high at 0.8979.

On the flip side, a downside move below Monday’s low at 0.8769 will drag the asset toward December 21 low at 0.8716. A slippage of the latter will drag the asset toward December 19 low at 0.8691.

EUR/GBP hourly chart