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EURGBP Eyes 10-Month High, Positive Momentum May Be Easing

EURGBP is rising for the third straight day and is currently trading close to the 10-month high of 0.9029 recorded earlier in the month.

Supporting the view for a bullish bias are the positively aligned Tenkan- and Kijun-sen lines. The easing Kijun-sen, though, may be hinting that upside momentum is weakening. The RSI, which continues to rise in bullish territory, also acts as a testament to the positive bias. Notice, though, that the indicator is not far below the 70 overbought level.

Immediate resistance to additional gains could be taking place around 0.9029, the aforementioned 10-month peak, with stronger advancing bringing into focus the 0.91 round figure.

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On the way down, support may come around the 0.90 handle, with a downside violation turning the attention to the region around the current levels of the Tenkan- and Kijun-sen lines at 0.8961 and 0.8942 respectively – the area around these two encapsulates a couple of tops from previous months. Further below, the zone around the current level of the 50-day moving average at 0.8884 would be eyed, including the 0.89 mark.

The medium-term picture is positive: price action is confirming the signal given by the bullish cross recorded in early July when the 50-day MA moved above the 100-day one, with trading activity taking place above the two MA lines, as well as above the Ichimoku cloud.

Overall, both the short- and medium-term outlooks are looking bullish at the moment.

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