EURGBP is currently experiencing a pullback after a strong upward rally that peaked near the 0.86672 level. Price action shows the pair has retraced to approximately 0.85477. This coincides with the 38.2% Fibonacci retracement level at 0.85396, suggesting potential support in this zone.
The chart reveals that EURGBP has been trading within a defined uptrend since early April, breaking above previous resistance levels with conviction.
Key Fibonacci retracement levels are providing technical reference points for traders, with the 38.2% level at 0.85396, the 50% level at 0.85002, and the 61.8% level at 0.84608. The current price action suggests the pair is finding initial support at the 38.2% level, though further weakness could see it test deeper retracement levels.
The 100 SMA (blue line) and 200 SMA (red line) are both trending upward with the 100 SMA positioned above the 200 SMA, confirming the bullish momentum that has been in place.
The stochastic oscillator (14,3,3) is showing signs of turning lower from the overbought territory, indicating potential continuation of the current pullback. Still, the oscillator is closing in on the oversold region to suggest that buyers could regain the upper hand soon.
Meanwhile, the MACD (12,26,close) shows divergence as it begins to decline while still in positive territory, suggesting diminishing bullish momentum and highlighting the ongoing correction. This could carry on until technical indicators point to exhaustion among sellers.
The euro staged a relief rally thanks to Trump’s decision to announce a 90-day delay in tariffs for most of its trade partners, except China. This also follows Germany’s approval of new coalition plans for the incoming government under the leadership of Chancellor Merz, easing political anxiety in the region as well.
Meanwhile, sterling likely shed its earlier gains on account of a relatively stronger trade footing compared to the rest of its peers in the EU. Traders are probably bracing for the next round of top-tier UK data next week as well.