- EUR/GBP is consolidating previous session's spike, trades in narrow range.
- Sterling slumped overnight post inflation data miss, pushing EUR/GBP above 0.87 handle.
- Upside in the pair remains capped at 21-EMA at 0.8722, further upside only on break above.
- Technical studies are turning bullish, RSI biased higher and Stocks are on the verge of rollover from oversold levels.
- We see +ve DMI is on verge of a crossover on -ve DMI and price has broken above 5-DMA.
- Break out at 21-EMA raises scope for test of 50-DMA at 0.8797. While on the downside, retrace below 5-DMA negates bullish bias.
- Focus now on UK retail sales data for further impetus.
Support levels - 0.8665 (5-DMA), 0.8620 (April 17 low), 0.86, 0.8580 (trendline)
Resistance levels - 0.8723 (21-EMA), 0.88 (50-DMA), 0.8812 (100-DMA)
Recommendation: Good to go long on breakout above 21-EMA, SL: 0.8665, TP: 0.8740/ 0.88/ 0.8815
FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at 83.6363 (Bullish), while Hourly GBP Spot Index was at -85.8536 (Bearish) at 0540 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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