EUR/GBP Price Analysis: Unable to crack the 20-DMA, retraces towards 0.8740s

• EUR/GBP rebounded at the 50-day Exponential Moving Average (EMA), as buyers eye 0.8800.
• UK’s upbeat political news briefly underpinned the British Pound, though it retraced its gains as euphoria waned.
• Near term, the EUR/GBP might correct towards 0.8700 before resuming its uptrend.

The EUR/GBP reclaims the 50-day EMA and advances steadily toward 0.8750, though it faced resistance in the 20-day EMA at around 0.8751, as it aims towards 0.8800, amidst some UK’s political stability. News that Rishi Sunak is the new head of the Conservative Party, and consequently the new Prime Minister, calmed the markets though the Pound Sterling weakened. At the time of writing, the EUR/GBP sits at around 0.8746, above its opening price, by a decent 0.27% margin.

EUR/GBP Price Forecast: Technical outlook

From a daily chart perspective, the EUR/GBP remains neutral-biased. However, once it clears the 20-day EMA, it could send the pair towards 0.8800, ahead of the next supply zone, the October 12 high at 0.8866, followed by the 0.8900 figure. Notably is that the Relative Strength Index (RSI) slope shifted upwards, meaning buyers are gathering momentum, preparing to attack 0.8800.

In the short term, the EUR/GBP hourly chart depicts the pair gapped down on positive news from the UK, opening at around 0.8660. Later, the Euro recovered from its earlier losses and reclaimed the 0.8700 mark, as the EUR/GBP was headed toward the daily high at 0.8763 before the pair retraced to current exchange rates in sympathy with the Relative Strength Index (RSI), which aimed downwards.

Given the backdrop, the EUR/GBP first support would be the confluence of the 50 and 100-EMAs at around 0.8719/13. Break below will expose the 20-EMA at 0.8703, followed by the 200-EMA at 0.8697, ahead of the S1 daily pivot at 0.8693.

EUR/GBP Key Technical Levels