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Rounded bottom: The EUR/GBP has been coming off a rounded bottom since finding support at 0.8410 to start April. The 4H RSI has held above 40 and tagged 70 a couple of times, reflecting bullish momentum. However, the moving averages tell the story of a sideways market. At the 4/18 US trading session, price is around the 200-SMA, which could be assessed as neutral in the context of a ranging market because the 200SMA represents “mean” price action.
Rising Trendline: The 4H chart also shows a rising trendline that appears to be respected at the moment. Then a rally above the current 4/18 high of 0.8573 would suggest continuation of the short-term uptrend since April.
Will it get back to the 0.8794 and 0.8814 highs? The prevailing bullish trend seen in daily chart suggests this scenario, but we should also consider 0.8716 as a more conservative target/expected resistance.
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.