EUR/GBP Price Analysis: Soars following UK inflation release, eyes key technical levels

• EUR/GBP tests 20-day EMA ahead of challenging the 0.8600 figure.
• Oscillators portray buyers gaining momentum in the near term; long-term, further EUR/GBP downside is expected.
• The EUR/GBP YTD low at 0.8518 could be the next support.

EUR/GBP rallies on Wednesday, after the release of inflation in the UK, spurred a knee-jerk reaction, with most Pound Sterling (GBP) Currency pairs gaining to the detriment of the GBP. At the time of writing, the EUR/GBP is trading at 0.8597, above its opening price by 0.52%, after hitting a low of 0.8524.

EUR/GBP Price Analysis: Technical outlook

From a daily chart perspective, the EUR/GBP is downward biased, though testing the 20-day Exponential Moving Average (EMA) at 0.8595, which, if breached, will put the 0.8600 figure for grabs. It should be said; in the near term, the EUR/GBP bias is neutral to slightly upward, as the Relative Strength Index (RSI) indicator aims up, about to turn bullish. Moreover, the three-day Rate of Change (RoC) is the largest since March 23.

If the EUR/GBP surpasses those levels, the next stop would be the 50-day EMA at 0.8664. Upside risks lie at the confluence of the 200 and the 100-day EMAs, at 0.8702 and 0.8708, respectively. However, if EUR/GBP resumes its downtrend, the first support would be the June 20 daily high at 0.8581, followed by the psychological 0.8550 area. Once broken, the EUR/GBP's next support would be the year-to-date (YTD) low of 0.8518.

EUR/GBP Price Action – Daily chart