EURGBP touched 14-month highs of 0.7908 today on increased upside momentum. The pair has been on an uptrend since November 2015 and has risen sharply above the 200-day moving average, strengthening the bullish outlook.
Today’s rally was capped by the upper Bollinger band and this may restrain further gains in the near term. Other indicators also suggest limited scope for more gains. RSI is still rising and fast approaching overbought levels but the stochastics have already started moving into overbought territory.
Having broken through the key 0.77, 0.78 and 0.79 levels in just over a month, the next target is 0.80, which it hasn’t crossed since December 2014.
To the downside, the nearest support comes at 0.7727 – a recent closing support level. This also corresponds with the centre line of the Bollinger Bands where prices have mostly held above it since the current rally started. A shift to below the centre line would weaken the bullish bias.
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