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EUR/GBP Price Analysis: Inches closer to 5-month tops, comfortable above 0.8800 mark ahead of ECB

  • EUR/GBP trades with a positive bias for the fourth consecutive session on Thursday.
  • The set-up remains tilted in favour of bulls and support prospects for further gains.

The EUR/GBP cross traded with a mild positive bias for the fourth consecutive session on Thursday, albeit continued with its struggle to find acceptance above 50% Fibonacci level of the 0.9398-0.8276 downfall

The cross struggled to extend the momentum and remained below the overnight swing high, or multi-month tops as investors refrained from placing any aggressive bets ahead of the highly anticipated ECB decision.

Given that the cross has been able to sustain above the very important 200-day SMA, the near-term bias still seems tilted in favour of bullish and support prospects for an extension of the recent strong positive move.

However, RSI on the daily chart is already flashing slightly overbought conditions, which seemed to be the only factor holding investors from placing aggressive bullish positions and capping any further strong gains.

Hence, it will be prudent to wait for some near-term consolidation or a strong follow-through buying beyond mid-0.8800s (overnight swing high) before positioning for a move towards the 0.8900 round-figure mark.

On the flip side, any pullback might continue to find decent support near the 0.8745 region (200-DMA) and still be seen as a buying opportunity, which should eventually help limit any deeper losses, at least for the time being.

EUR/GBP daily chart

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Technical levels to watch

 

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