EUR/GBP soars and threatens the 200-day SMA

• EUR/GBP rose by more than 0.46% to monthly highs around 0.8680.
• The bulls gathered enough momentum and breached through the 20-day SMA.
• RSI and MACD indicate strong bullish momentum for the short term.

The EUR/GBP cross broke out on Tuesday and rose to a monthly high of 0.8690. Indicators gained ground on the daily chart and indicate that further upside may be on the horizon.

The Relative Strength Index (RSI) points north in positive territory, while the Moving Average Convergence (MACD) now exhibits green bars. On the four-hour chart, the RSI rose near the overbought threshold and was quickly rejected, while the MACD’s histogram prints rising bullish bars, indicating that the buyers have strong momentum in the short term. Back to the daily chart, the pair is above the 20 and 100-day Simple Moving Averages (SMA) but is still below the 200-day average, which is the next target for the bulls at the 0.8700 area. That being said, this overall outlook favours a neutral to bullish technical outlook for the EUR/GBP.

 Support levels: 0.8660 (20-day SMA), 0.8630, 0.8615.
 Resistance levels:  0.8680, 0.8700 (200-day SMA), 0.8730. 

EUR/GBP Daily Chart