- The EUR/GBP seesawed in a volatile 100-pip trading session on Friday.
- Weak data from the UK and the EU left traders undecided on which direction to take.
- The EUR/GBP daily chart depicts the pair as upward biased, but the 4-hour illustrates the cross might correct towards 0.8550 before resuming the uptrend.
The EUR/GBP advances during the day, though retraced from near two-week highs around 0.8678 on Friday, amidst an upbeat market mood that triggered support for risk-sensitive currencies in the FX space, the British pound one of them. At 0.8621, the EUR/GBP is trading in the green by just 0.19%.
A volatile session characterized EUR/GBP Friday’s price action. Weaker than expected, UK’s factory data lifted the cross-currency. Nevertheless, it began to pare its losses of late after hot Eurozone inflation, alongside languish factory output, was reported, painting a gloomy scenario for the EU.
EUR/GBP Daily chart
The EUR/GBP daily chart depicts the pair as neutral-upward biased. Traders should note how the Relative Strength Index (RSI) stayed steady between 50 and 70 since May, while the EUR/GBP rallied from 0.8250 to the YTD high above 0.8700. Therefore, the EUR/GBP might extend its rally in the near term and even challenge the YTD high above 0.8700, but a break above 0.8678 is needed. On the other hand, if EUR/GBP sellers plunge prices below 0.8550, that could pave the way to the 200-day EMA at 0.8442.
EUR/GBP 4-Hour chart
In the near term, the EUR/GBP 4-hour chart depicts the pair trading inside an ascending channel that has kept the cross-currency pair trading within a 100-pip range. On Friday, the cross reached the top of the range and reversed, piercing the R2 and R1 daily pivots, each at 0.8662 and 0.8633, before settling around the 20-EMA at 0.8622. Also, the Relative Strength Index (RSI) at 50.72 accelerates its fall towards the mid-line, and a cross below would pave the way for further downside in the EUR/GBP pair.
Therefore, the EUR/GBP’s first support would be the 50-EMA at 0.8609. Break below would expose the 100-EMA at 0.8592, followed by the June 30 swing low at 0.8551.