EUR/GBP Price Analysis: Subdued Around 0.8410 As Positive Divergence Appear

By Christian Borjon Valencia of FX Street

Thursday, July 18, 2024 8:30 PM EDT

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EUR/GBP edges up to 0.8410 following the ECB's rate decision and strong UK jobs data.
Technical analysis shows a potential 'falling wedge' pattern, indicating possible new weekly highs.
Key resistance levels: 0.8460 (July 8 high), 0.8478 (50-DMA), and 0.8499 (July 1 peak); support levels: 0.8403 (July 18 low) and 0.8383 (YTD low).

The EUR/GBP edged up some 0.10% on Thursday after the European Central Bank (ECB) held rates unchanged. Additionally, solid jobs data from the United Kingdom (UK) kept the cross-pair from rallying after the ECB’s decision, so the pair remained at around the 0.8410 area for the second straight day.

EUR/GBP Price Analysis: Technical outlook

The EUR/GBP remains downward biased from a technical standpoint, and it seems that a ‘falling wedge’ is forming, which most likely pushes the cross-pair to new weekly highs.

Momentum favors sellers, with the Relative Strength Index (RSI) remaining bearish. Nevertheless, a positive divergence between price action falling to lower lows and the RSI registering higher lows might open the door for an upward correction.

Key resistance levels for the pair lie above July 8 high at 0.8460. A breach of the latter will expose the 50-day moving average (DMA) at 0.8478, before testing the July 1 peak of 0.8499. Further gains are seen above that level, with the 100-DMA at 0.8520 and the 200-DMA at 0.8572.

On the flip side, if EUR/GBP extends its losses past the July 18 bottom of 0.8403, the next support would be the year-to-date (YTD) low of 0.8383. A further downside is seen beneath the latter, at the August 2, 2022, low of 0.8339.

EUR/GBP Price Action – Daily Chart

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