EUR/GBP Price Analysis: Struggles at 0.8700, prints two-month high as ECB meeting looms

• EUR/GBP fails to decisively break above the 100 and 200-day EMAs at 0.8664 and 0.8679, respectively, after hitting a two-month high at 0.8700.
• If EUR/GBP pulls back, support levels emerge at 50-day EMA at 0.8619, 0.8600, 20-day EMA at 0.8594, and July 10 high at 0.8584.
• A break above 0.8700 will set sights on the next resistance at the May 11 high of 0.8734, followed by the resistance trendline from the YTD high at 0.8978 around 0.8740/50.

The EUR/GBP finished Friday’s session almost flat, failing to decisively break above the 100 and 200-day Exponential Moving Averages (EMAs), each at  0.8664 and 0.8679, respectively after the cross hit a new two-month high at 0.8700. As we head into the weekend, the EUR/GBP is trading at 0.8650, gains 0.03%.

EUR/GBP Price Analysis: Technical outlook

With EUR/GBP remaining unable to breach the 0.8700 figure, the Euro (EUR) remains exposed to selling pressure, but the next week’s upcoming monetary policy meeting of the European Central Bank (ECB) could lend a lifeline to hover around the current exchange rate, as it happened on Thursday and Friday.

If EUR/GBP pullbacks, the first support would be the 50-day EMA at 0.8619, followed by the 0.8600 mark. If the cross extends its drop past those two levels, it’s almost certain that it would drop past the 0-day EMA at 0.8594, with sellers eying the July 10 high at 0.8584, followed by the year-to-date (YTD) low of 0.8504.

Conversely, if EUR/GBP breaks above 0.8700, the EUR/GBP's next resistance level would be the May 11 high at 0.8734, followed by a resistance trendline drawn from the YTD high at 0.8978 that passes at around 0.8740/50. A breach of the latter will expose the 0.8800 mark.

EUR/GBP Price Action – Daily chart