EUR/GBP Technical Analysis: Corrective bounce, re-test of 200-day EMA likely

• The EUR/GBP is reporting moderate gains in early Europe and could re-test the 200-day exponential moving average (EMA) of 0.8857 as the sell-off from the recent high of 0.8996 is looking overdone, according to the relative strength index (RSI) on the 4-hour chart.
• The RSI on the hourly chart is rising from the oversold territory and the pair has cleared the descending trendline.
• The moving average convergence divergence (MACD) has moved above zero, confirming a bearish-to-bullish trend change on the hourly chart.
• The bias remains bearish as indicated by the downward sloping 5-day and 10-day EMAs and daily close below the 200-day EMA.

Hourly Chart

Spot Rate: 0.8847

Daily High: 0.8847

Daily Low: 0.8836

Trend: Intraday bullish

Resistance

R1: 0.8857 (200-day EMA)

R2: 0.8881 (10-day EMA)

R3: 0.8900 (psychological hurdle)

Support

S1: 0.8834 (previous day’s low)

S2: 0.8816 (July 16 low)

S3: 0.8803 (61.8% Fib R of 0.8621/0.9099)