EUR/GBP Price Analysis: Probing the 200-DMA after a 100-pip rally

• Gains in the EUR/USD lift the EUR/GBP, gaining 1.01%.
• The market sentiment improvement benefits the EUR, as it gains against most G8 currencies.
• EUR/GBP Price Forecast: Neutral biased but a daily close above the 200-DMA would shift the bias to neutral upwards.

The EUR/GBP is rallying sharply from Monday’s highs and is probing the 200-day moving average (DMA), which in the case of being broken and then a daily close achieved, would suggest a shift in the EUR/GBP bias. At the time of writing, the EUR/GBP is trading at 0.8470.

An upbeat market sentiment keeps safe-haven peers pressured. In the case of the EUR/GBP, the GBP/USD has remained downward pressured, losing 0.04% in the day. Contrarily, the EUR/USD advances almost 1%, a tailwind for the EUR/GBP.

Overnight, the EUR/GBP was subdued in the Asian Pacific session, within the 0.8383-90 range. However, as European traders got to their desks, the shared currency began its 100-rally of the day, breaking the 0.8400 mark on its way to the daily high at 0.8482.

EUR/GBP Price Forecast: Technical outlook

The EUR/GBP daily chart depicts a neutral bias. However, as mentioned in the first paragraph, a daily close above the 200-DMA which sits at 0.8467, would open the door for further gains and shift the bias to neutral-upwards.

If that scenario plays out, the EUR/GBP first resistance would be 0.8500. Breach of the latter would expose the confluence of a descending channel top-trendline and December 20, 2021, 0.8550, a daily high, followed by December 8, 2021, a daily high at 0.8599.

On the flip side, the EUR/GBP first support would be 0.8400. Once cleared, the next demand zone would be March 11 daily low at 0.8360, followed by February 21 daily low at 0.8309.

Technical levels to watch